- Bond market sentiment closes on a bearish note
- Focus on Bond auctions
- Money market liquidity increases
The secondary bond market sentiment closed the week ending 27th August 2021 on a bearish note as activity was seen moderating considerably towards the later part of the week. The limited activity witnessed during the week predominantly centered on the 15.11.23 and 2024 (i.e. 15.09.24 & 01.12.24) maturities as its yields were seen hitting highs of 7.00%, 8.05% and 8.12% respectively against its previous weeks closing level of 6.70/80, 7.50/80 and 7.80/90.
Today’s (30th August) Bond auctions will have on offer an amount of Rs.50 billion in total, consisting of Rs.30 billion of the 01.09.2023 maturity and Rs.20 billion of the 15.10.2025 maturity. The maximum yield rate for acceptance for the said maturities was published at 6.75% and 8.55% respectively. The weighted average yields at the bond auctions conducted on 29th June 2021, prior to monetary policy adjustment were 6.87%, 7.47%, 8.17% and 8.86% for the maturities of 01.12.24, 01.02.26, 01.05.28 and 15.03.31 respectively. The 2nd phase of the auction was opened for the undersubscribed maturities while a direct issuance window was opened for the subscribed maturities.
Meanwhile, the weekly Treasury bill auction conducted during the week, the first after the monetary policy announcement, saw its subscription level increase to 66.05% of its total offered amount while the weighted average rates increased across the board by 54, 56 and 61 basis points respectively to 5.87%, 5.90% and 5.93%.
The foreign holding in Rupee bonds remained mostly unchanged at Rs.2.087 billion for the week ending 25th August 2021 while the daily secondary market Treasury bond/bill transacted volumes for the first four trading days of the week averaged Rs.8.98 billion.
In money markets, the Domestic Operations Department (DOD) of Central Bank drained out liquidity during the week on an overnight basis at weighted average yields ranging from 5.71% to 5.74% as the total outstanding liquidity surplus increased to Rs.13.26 billion by the end of the week from its previous weeks Rs.9.15 billion. The weighted average yields on overnight call money and repo rates averaged 5.77% and 5.75% respectively for the week while the CBSL’s holding of Gov. Security’s increased further to Rs.1,215.10 billion from its previous weeks Rs.1,203.441 billion.
USD/LKR
The Forex market continued to remain inactive during the week.
The daily USD/LKR average traded volume for the first four trading days of the week stood at US $ 12.56 million.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)