The overall activity in the secondary bond market continued to be dull during the week ending 30th July 2021 as yields were seen fluctuating within a narrow range on the back of thin volumes. The limited activity centred on the 15.12.22, 01.10.23 and 15.11.23 maturities as its yields were seen moving within the range of 5.72% to 5.80%, 6.27% to 6.30% and 6.35% to 6.38%.
The persistent reduction in demand at the weekly Treasury bill auction which saw its total accepted volume dip further to a low of 58.30% of its total offered amount coupled with a drop in the total accepted amount at the T-bond auctions to 68.90% against a total offered amount of Rs.120 billion were seen as the reasons that led to the dull momentum. An issuance window of 20% each for the 01.12.24 and 15.03.31 maturities was unexpectedly opened following the announcement of the bond auction results, which was seen dampening sentiment further.
In the meantime, Colombo Consumer Price Index (CCPI) or inflation for the month of July increased for a third consecutive month to 5.7% on its point to point, when compared against its previous month’s figures of 5.2% while its annual average too increased further to 4.2% from 4.1%.
In money markets, the total outstanding surplus liquidity increased to Rs.8.72 billion against its previous weeks of Rs.0.03 billion while CBSL’s holding of Gov. Securities increased to Rs.1,141.05 billion against its previous weeks of Rs.922.09 billion. The weighted average rates on overnight call money and repo increased further to average 5.11% and 5.14% respectively for the week.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)
Courtesy: Wealth Trust Securities Ltd