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Daily report for the 20th May 2025- Courtesy Wealth Trust Securities Ltd
- Secondary Bond Market Yields Increase Further
- Rs 157.50 Bn T Bill Auction in Focus
- Rupee Depreciates Further
The secondary bond market yesterday saw yields increase further on the back of continued selling pressure as market participants were seen adopting a cautious stance ahead of the upcoming Monetary Policy Review due on the 22nd of May – this Thursday. Market activity and transaction volumes were seen at healthy levels. Meanwhile, the currency continued to trade on a weaker note, adding to the cautious sentiment in financial markets.
The 15.09.27 maturity was seen trading at the rates of 9.20%-9.21%. The 15.02.28 and 15.03.28 maturity was seen trading at the rates of 9.62% and 9.65% respectively. The 01.07.28 and 15.10.28 maturities were seen trading at the rates of 9.75% and 9.80%. The yield on the 15.06.29 and 15.12.29 maturities were seen increasing to trade at 10.15% and 10.18%-10.20% respectively. The 15.03.31 maturity was seen trading up the range of 10.68%-10.72%. The 01.11.33 maturity was seen trading within the range of 10.95%-10.97%.
This comes ahead of the Treasury bill auction due today, which will have a total amount of Rs. 157.50 billion on offer, a decrease of Rs. 15.50 billion over the previous week. This will consist of Rs. 20.00 billion on the 91-day maturity, Rs 50.00 billion on the 182-day and Rs. 87.50 billion on the 364-day maturity.
For reference, the weekly Treasury bill auction conducted last Wednesday (14th May) was fully subscribed. The entire Rs 173.00 billion offered was successfully raised at the 1st phase in competitive bidding. The total bids received exceeded the offered amount by 2.06 times. The auction saw weighted average yield rates remain unchanged from the previous week. Accordingly, the weighted average rates on the 91-day, 182-day and 364-day tenors were recorded at 7.65%, 7.98% and 8.30% respectively.
The total secondary market Treasury bond/bill transacted volume for 19th May was Rs. 15.15 billion.
In money markets, the weighted average rates on overnight call money and Repo stood at 7.97% and 7.98% respectively.
The net liquidity surplus increased to Rs. 174.11 billion yesterday. Rs. 2.00 billion was withdrawn from the Central Banks SLFR (Standing Lending Facility Rate) of 8.50%, while an amount of Rs. 176.11 billion was deposited at Central Banks SDFR (Standard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 were seen closing the day depreciating further to Rs. 300.75/301.10 as against 299.85/300.05 the previous day.
The total USD/LKR traded volume for 19th May was US $ 91.35 million.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)