The secondary bond market sentiment turned positive during the week ending May 7, 2021 reversing its bearish sentiment witnessed over the previous week, driven by persistent and continuous buying interest mainly on the very short end of the yield curve. The bullish sentiment was supported by the outcome of the weekly Treasury Bill auction where the total subscription increased to 77.58% while the 364 day bill cut off rate stood steady at 5.18% for a third consecutive week.
Yields of the most sorted maturities of 2022’s (i.e. 01.10.22, 15.11.22 & 15.12.22) and 2023’s (i.e. 15.07.23, 01.09.23 & 15.11.23) hit weekly lows of 5.65%, 5.67%, 5.73%, 6.20%, 6.22% and 6.32% respectively against its previous weeks closing levels of 5.90/00, 5.95/03 each, 6.45/55, 6.45/60 and 6.52/60. In addition maturities of 01.12.24, 01.05.25, early 2026’s (i.e. 15.01.26 & 01.02.26) and 01.08.26 changed hands at level of 6.70% to 6.80%, 7.05%, 7.32% to 7.38% and 7.60% to 7.75% as well, which led to a downward shift of the yield curve, week on week.
In money markets, the total outstanding liquidity surplus decreased against its previous weeks while the CBSL’s holding of Government Security’s too decreased to Rs.870.37 billion against its previous weeks Rs. 888.70 billion. The weighted average rates on overnight call money and repo remained mostly unchanged to average 4.66% and 4.69% for the week.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)
Courtesy: Wealth Trust Securities Ltd