The secondary bond market yield curve recorded a shift downwards during the week ending December 3, 2021 on the back of renewed buying interest driven by the continued positive outcomes of primary auctions.
At the weekly Treasury Bill auction, the total auctioned amount of Rs. 60 billion was fully subscribed for seventh consective week while the weighted average rate of the 91-day bill decreased by a further 30 basis points to 7.23%. The weighted averagre rates of the 182-day and 364-day bills decreased by five and four basis points as well while the accepted amount on the 182-day maturity was seen exceeding the 91-day for the first time in 29 weeks.
At the Treasury bond auctions, the total offered amount of Rs. 30 billion was fully accepted at its 1st phase of the auctions while the weighted averages were recorded marginally below its secondary market rates while a further amount of Rs. 3 billion was successfully issued under the Direct Issuance window on the 15.05.2030 maturity.
On the back of increased activity, considerable buying interest on the liquid maturities 01.12.24, 15.03.25, 15.01.26, 15.01.27, 01.09.28, 15.05.30 and 15.03.31 saw its yields dip to lows of 9.00%, 9.48%, 10.02%, 10.30%, 11.15%, 11.50% and 11.78% against its previous weeks closing levels of 9.35/45, 9.70/90, 10.30/45, 10.70/85, 11.30/50, 11.50/70 and 11.80/88. Furthermore, 2023’s (i.e. 15.05.23, 15.07.23, 01.09.23 and 15.12.23) and other 2024s (i.e. 15.03.24 and 15.09.24) were seen changing hands from highs of 8.75% and 9.30% to lows of 8.35% and 8.95%. In secondary market bills, December 2021, Janaury to March 2022 and June 2022 maturities changed hands at levels of 6.75%, 7.00% to 7.40% and 7.64% to 7.93%.
This was on the back drop of the Colombo Consumer Price Index (CCPI - Base 2013=100) increasing to its highest level since its rebase in January 2015 to record 9.9% on its point to point for the month of November when compared against its previous month’s figures of 7.6%.
In money markets, the total outstanding liquidity deficit continued to increase during the week to register at Rs. 319.30 billion by the end of the week against its previous weeks Rs. 282.99 billion while CBSL’s holding of Govt. Securities continued to decrease to record Rs.1,414.67 billion against its previous weeks of Rs.1,433.91 billion. The weighted average rates on overnight call money and repo was 5.92% and 5.96% for the week.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)
Courtesy: Wealth Trust Securities Ltd