The upward momentum in primary and secondary market government security yields continued during the week ending October 8, following through from its previous week. The weighted average rates at the weekly Treasury Bill auction increased across the board by 45, 21 and 27 basis points on the 91 day, 182 day and 364 day maturities.
However, activity in the secondary bond market continued at a sporadic pace as most market participants opted to be on sidelines ahead of scheduled Treasury bond auctions for the 12th of October and the upcoming monetary policy announcement. Limited trades were witnessed on the maturities of 2023’s (i.e. 15.01.23, 15.07.23, 01.10.23 and 15.11.23) and 2024’s (i.e. 15.09.24 and 01.12.24) at levels of 8.20% to 8.50% and 9.00% to 9.02%.
The daily secondary market Treasury Bonds and Bills transacted volumes for the first four trading days of the week averaged Rs. 8.74 billion.
In money markets, the total outstanding liquidity shortage at the end of the week decreased sharply against its previous week while CBSL’s holding of Gov. Securities increased against its previous week. Nevertheless, the weighted average rates on overnight call money and repo remained mostly unchanged at 5.91% and 5.93% respectively for the week against its previous weeks 5.94% and 5.93% as the Domestic Operations Department (DOD) of Central Bank drained out liquidity during the week from an overnight to seven-day period by way of repo auctions at weighted average yields ranging from 5.95% to 5.98%. The overnight net liquidity shortfall fluctuated during the week, within a high of Rs.48.21 billion to a low of Rs.9.86 billion.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)
Courtesy: Wealth Trust Securities Ltd
– Sunday Observer Sri Lanka
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