The two-year and five-year bond yield were seen crossing 14.00% and 15.00% for the first time since April -May 2009 at its auctions conducted on Friday and against a pre-auction rate of 11.50/12.50 and 12.75/13.75 respectively. The very steep increase in yields at the Treasury Bond auctions conducted on Friday saw the two-year, five-year and the nine-year maturities record weighted average yields of 14.41%, 14.70% and 15.42% respectively leading to a steep shift upwards of the overall yield curve. Only a total amount of Rs.73.06 billion was accepted against a total offered amount of Rs.120 billion.
Meanwhile, the secondary bond market was inactive during the week baring a few trades on the 01.08.25 maturity at levels of 13.00% to 13.05%, pre-auction while in the secondary bill market, June 2022 maturities were seen changing hands at level of 9.80% to 9.85% and 10.34% to 10.40% respectively pre and post bill auction sessions.
In money markets, the total outstanding liquidity deficit increased to Rs.703.57 billion by the end of the week against its previous weeks Rs. 664.67 billion while CBSL’s holding of Gov. Securities decreased to Rs.1,521.70 billion against its previous weeks of Rs.1529.19 billion.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)
Courtesy: Wealth Trust Securities Ltd