Daily report for the 03rd December 2024 – Courtesy Wealth Trust Securities Ltd
- Secondary Bond Market Yields Increase Ahead of Rs 192.50 Bn T-Bill Auction
- Rupee appreciates slightly
The Secondary Bond Market yesterday saw yields move up on profit taking pressure, as market participants looked to book profits from the recent bull run that was set off by the Central Bank monetary policy easing last week. Trading activity and transaction volumes were seen at moderate levels.
The 15.12.26 maturity was seen trading at the rate of 9.45%, broadly steady. However, the yield on the 01.05.27 maturity was seen increasing from an intraday low to a high of 10.19%-10.22% while the 15.10.27 maturity was seen trading at the elevated rate of 10.32%. The 2028 tenors followed suit, with the bulk of the trading focused on these maturities. The yield on the 15.02.28 and 15.03.28 maturities increased from 10.45% to 10.57% intraday. The 01.05.28, 15.10.28 and 15.12.28 maturities traded up the ranges of 10.50%-10.58%, 10.60%-10.65% and at the rate of 10.70% respectively.
This comes ahead of the Treasury bill auction also due today, which will have a total amount of Rs. 192.50 billion on offer, an increase of Rs. 67.50 billion over the previous week. This will consist of Rs. 58.50 billion on the 91-day maturity and Rs 67.00 billion each on the 182-day and 364-day maturities.
For reference, at the weekly Treasury Bill auction conducted last Wednesday (28th November), weighted average rates were seen declining steeply following the monetary policy announcement. This marked the third consecutive week where rates were seen declining across the board where the weighted average rate on the 91-day tenor decreased by 57 basis points to 8.73%, the 182-day tenor by 63 basis points to 8.97%, and the 364-day tenor by 70 basis points to 9.08%. Total bids received exceeded the offered amount by 2.85 times, and the entire Rs 125.00 billion on offer was successfully raised at the 1st phase.
The total secondary market Treasury bond/bill transacted volume for 02nd December was Rs. 8.86 billion.
In money markets, the weighted average rates on overnight call money and Repo stood at 8.15% and 8.27% respectively. The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight and 7-day term reverse repo auctions for Rs. 23.33 billion and Rs 50.00 billion at the weighted average rate of 8.07% and 8.21% respectively.
The net liquidity surplus stood at Rs. 127.89 billion yesterday. Rs 4.10 billion was withdrawn from the Central Banks SLFR (Standing Lending Facility Rate) of 8.50%, while an amount of Rs. 205.32 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 appreciating marginally to Rs. 290.50/290.55 as against 290.65/290.70the previous day.
The total USD/LKR traded volume for 02nd December was US $ 89.34 million.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)