The secondary market bond yields increased across the yield curve during the week ending 01st October 2021 driven by continued selling interest on the back of sporadic trades, following the outcomes of the Treasury bond auctions and the weekly Treasury Bill auction. The two Treasury bond auctions conducted during the week following the removal of the stipulated cut off rates, produced mixed outcomes as the short dated maturity of 15.11.2023 recorded a weighted average rate of 8.12%, above its pre-auction level of 7.75/8.00 while the long dated maturity of 15.05.2030 recorded a weighted average rate of 10.23%, within its pre-auction rate of 9.90/10.60
Weighted average rates increased sharply to highs of 6.70%, 6.99% and 7.01% on the 91-day, 182-day and 364-day maturities, similar to levels of 6.71%, 7.10% and 7.40% recorded at the May 20, 2020 and April 1, 2020 auctions.
Yields on the 01.12.24 maturity increased to a weekly high of 9.115%, a closing level last seen in April 2020 and against its previous week closing level of 8.20/50. In addition, yields on the maturities of 01.10.22, 15.01.23 and 01.09.23 increased to 7.50%, 7.75% and 7.90%.
In money markets, the weighted average rates on overnight call money and repo decreased marginally to 5.94% and 5.93% for the week while the net liquidity shortfall at the end of the week increased to Rs. 240.01 billion against its previous week’s Rs. 200.62 billion.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)
Courtesy: Wealth Trust Securities Ltd