The shortened trading week ending February 5, 2021 saw secondary market bond yields continue its upward trend for a third consecutive week driven by the outcome of the weekly Treasury bill auction where the total subscribed amount was seen falling short of its total offered amount for a second consecutive week. It accepted only an amount of Rs. 22.75 billion in total, against its previous week’s total accepted amount of Rs. 25 billion and against a total offered amount of Rs. 40 billion each week.
The liquid maturities of 2022s (i.e. 01.10.22 & 15.12.22), 2023’s (i.e. 01.10.23 and 15.12.23), 2024’s (i.e. 15.09.24 and 01.12.24) and 15.08.27 saw its yields increasing to weekly highs of 5.43%, 5.46%, 5.94%, 5.95%, 6.40%, 6.47% and 7.185% in comparison to its previous weeks closing levels of 5.40/45, 5.42/50, 5.75/85, 5.80/88, 6.30/35, 6.35/38 and 7.10/18, reflecting a upward shift of the overall yield curve. In addition, maturities of 2021’s (i.e. 01.05.21 and 01.08.21), 15.11.22, 15.01.23, 01.09.23, 2026’s (i.e. 15.01.26, 01.02.26 & 01.08.26) and 15.10.27 traded at levels of 4.67% to 4.80%, 5.40% to 5.41%, 5.45% to 5.48%, 5.90% to 5.91%, 6.80% to 6.84% and 7.15% to 7.153% as well while April, February and June 2021 bill maturities were seen changing hands at 4.58%, 4.65% and 4.78% respectively in the secondary market..
In money markets, the total outstanding market liquidity and the CBSL’s holding of Gov. Security’s increased marginally to Rs.116.49 billion and Rs.744.71 billion. The weighted average rates on overnight call money and repo remained mostly unchanged to average 4.55% and 4.57% for the week.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)
Courtesy: Wealth Trust Securities Ltd