In the Forex market, USD/LKR rate on spot contracts appreciated considerably during the week to hit a high of Rs.185.28 against its previous week closing levels of Rs. 185.60/65 on the back of selling interest by Banks. It closed the week at Rs. 185.22/27.
The daily USD/LKR average traded volume for the first three days of the week stood at US $ 70.54 million.
Government Securities Market
The wait and see policy adopted by most market participants leading to the General Election and subsequent to it, led to a bearish sentiment in the secondary bond market during the shortened trading week ending August 7. Limited activity was witnessed in the lead up to the weekly Treasury Bill auction, with yields on the market favourite maturities of 2022’s (i.e. 15.11.22 and 15.12.22), 2023’s (i.e. 15.01.23 and 01.09.23), 15.09.24 and 01.05.25 increasing to intraweek highs of 5.95%, 6.00%, 6.05%, 6.25%, 6.40% and 6.68% respectively against its previous weeks closing levels of 5.72/80 each, 5.75/85, 5.95/05, 6.22/30 and 6.50/60.
At the auction, stipulated cut off rates were increased to 4.67%, 4.76% and 4.94% on the 91-day, 182-day and 364-day maturities while weighted average rates were recorded at the same, reflecting an increase of eight basis points each across all three maturities.
However, yields pulled back marginally from these highs as the maturities hit lows of 5.82%, 5.90% each, 6.12%, 6.25% and 6.58% again on the back of buying interest. Maturities of 01.08.25, 2026’s (i.e.01.02.26, 01.06.26 and 01.08.26), 15.10.27 and 15.05.30 changed hands at levels of 6.68%, 6.65%, 6.72%, 6.74%, 7.10% to 7.11% and 7.35%.
The foreign holding in rupee bonds recorded a marginal outflow of Rs.13 million for the week ending August 5, 2020.
The daily secondary market Treasury Bond/Bill transacted volumes for the first three days of the week averaged Rs. 5.39 billion.
In money markets, the surge in overall market liquidity resulted in weighted average rates on overnight call money and repos averaging at 4.53% and 4.56% for the week.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)
Courtesy: Wealth Trust Securities Ltd