Secondary Bond Market Yields Edge Up; Activity moderates

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Daily report for the 09th December 2024 – Courtesy Wealth Trust Securities Ltd

  • Secondary Bond Market Yields Edge Up; Activity moderates
  • Rs 132.50 Bn T-Bond Auction Details Announced
  • Rupee Stable

The fresh trading week commenced on a dull note as yields in the secondary bond market increased marginally yesterday. Market participants were seen adopting a wait and see approach ahead of the upcoming Treasury Bond auction that is due later in the week.

Accordingly, the 15.09.27 and 15.12.27 maturities were seen changing hands at the elevated levels of 10.15%-10.16%. The 15.02.28, 01.05.28 and 15.12.28 maturities were seen trading at the rate of 10.48%-10.50%, 10.60% and 10.70%-10.72%. The 2029 tenors also saw rates increase, with the 15.06.29 and 15.09.29 trading within the range of 10.90%-10.95% collectively. The 15.05.30 maturity was also observed trading higher, within the range of 11.15%-11.20%.

The Central Bank of Sri Lanka is scheduled to conduct a Rs. 132.50 billion round of Treasury Bond auctions on the 12th of December (Thursday).

The auction will be comprised of:

  • Rs. 77.50 billion: Maturing on September 15, 2029, with a coupon rate of 11.00%.
  • Rs. 55.00 billion: Maturing on June 01, 2033, with a coupon rate of 09.00%.

In Secondary Market T-bills short term March/April (close to 3 months) maturities were seen trading within the range of 8.78%-8.68%. August 2025 maturities were seen trading within the range of 9.04%-8.92% and November 2025 maturities at the rate of 9.00%.

The total secondary market Treasury bond/bill transacted volume for 06th December was Rs. 8.59 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 8.04% and 8.15% respectively. The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight repo auction for Rs. 10.00 billion at the weighted average rate of 8.07%.

The net liquidity surplus stood at Rs. 220.43 billion yesterday. No funds were withdrawn from the Central Banks SLFR (Standing Lending Facility Rate) of 8.50%, while an amount of Rs. 230.43 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 7.50%.

Forex Market

In the Forex market, the USD/LKR rate on spot contracts closed the day broadly steady at Rs. 290.30/290.45 against its previous day’s closing level of Rs. 290.40/290.48.

The total USD/LKR traded volume for 09th December was US $ 121.83 million.

(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)