The secondary bond market sentiment turned bearish during the trading week ending February 10, as yields were seen increasing towards the latter part of the week on the back of moderate activity.
The increase in yields was led by the 15.05.26 duration as it was seen hitting a weekly high of 29.36% against its week’s opening low of 29.10%. In addition, selling interest on the maturities of 01.07.25 and two 2027s (i.e., 01.05.27 & 15.09.27) saw its yields hit intraweek highs of 32.20%, 29.25% each as well.
Trades on the maturities of 2028 (i.e., 15.01.28, 01.07.28 and 01.09.28), 15.05.31 and 01.07.32 were recorded at 27.11% to 27.14%, 26.20% to 26.23%, 25.82%, 27.10% and 26.10% to 26.78%, reflecting an upward shift of the overall yield curve.
The upward momentum was further supported by the weekly Treasury Bill auction outcome, where only an amount Rs. 53.6 billion was accepted in total at its first stage of the auction against its total offered amount of Rs.100 billion. Nevertheless, a further amount of Rs.71.40 billion was raised at the second stage of the auction, thereby leading to a full subscription.
In money markets, the weighted average rates on call money and repo were registered at 15.43% and 15.50% for the week as the total outstanding liquidity deficit decreased further during the week to Rs.168.93 billion by the end of the week against its previous weeks of Rs.297.63 billion.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)
Courtesy: Wealth Trust Securities Ltd