The secondary bond market gained a bullish momentum during the week ending January 8 as yields were seen decreasing further with sizeable volumes changing hands and activity increasing.
The yields of the more liquid maturities of 2022’s (i.e. 15.11.22 & 15.12.22), 2023’s (i.e. 15.01.23 & 01.10.23), 15.09.24, 01.05.25, 01.02.26 and 15.08.27 were seen decreasing to weekly lows of 5.52%, 5.53% each, 5.86%, 6.30%, 6.53%, 6.69% and 7.15% respectively against its previous week’s closing level of 5.58/63, 5.60/65, 5.65/70, 5.90/95, 6.35/40, 6.50/70, 6.65/75 and 7.10/20. In addition maturities of 01.10.22, 15.12.24 and 15.12.23 changed hands at levels of 5.50% to 5.60%, 6.38% to 6.39% and 5.90% to 6.03% as well.
This downward trend was well supported by the outcome of the weekly T-Bills action where the total offered amount was fully subscribed for the first time in 11 weeks. On the short dated bonds and bills, 01.05.21, 01.08.21, 15.12.21, February, April, June, July, August, September and October 2021 changed hands at levels 4.70%, 4.69%, 4.75% to 4.80%, 5.00%, 4.53% to 4.68%, 4.74%, 4.75%, 4.80%, 4.75% and 4.89%.
The First Treasury bond auctions for the year 2021 due today, will have in total an amount of Rs.100 billion on offer, consisting of Rs. 40 billion each of 01.12.2024 maturity and a new 15.01.2026 maturity and a further Rs.20 billion ofa 01.05.2028 maturity. Stipulated cut off rates were published as 6.39%, 6.73% and 7.44% respectively. The weighted average yields at the bond auctions conducted on 11th December 2020 for the maturities of 01.10.2023, 01.03.2026 and 01.01.2032 were recorded at 5.99%, 6.79% and 7.84%.
The daily secondary market Treasury Bond/Bill transacted volumes for the first four trading days of the week averaged Rs.11.18 billion.
In the money market, weighted average rates on overnight call money and repos remained mostly unchanged to average 4.54% and 4.56% respectively for the week as the total outstanding market liquidity remained high. The CBSL’s holding of Gov. Security’s was registered at Rs.731.25 billion.
(References: Central Bank of Sri Lanka, Bloomberg e-Bond trading platform, Money broking companies)
Courtesy: Wealth Trust Securities Ltd