Government Securities Market - (Week ended April 9, 2021) | Sunday Observer

Government Securities Market - (Week ended April 9, 2021)

11 April, 2021

The secondary bond market yield curve recorded an upward shift during the week ending April 9, 2021, as the weekly Treasury bill auction went undersubscribed for a fifth consecutive week and policy rates were held steady by the Central Bank of Sri Lanka at its monitory policy announcement on Thursday.

The primary Treasury Bond auctions conducted on Friday went undersubscribed as well as its second phase of the auction was opened on both the 01.09.2023 and 01.07.2028 maturities at its weighted average rates of 6.30% and 7.70% as the total offered amount - Rs. 40 billion was not fully subscribed to at its first phase of the auction. Nevertheless, only an amount of Rs.10.49 billion in total was subscribed, recording a short of Rs. 29.51 billion.

In the secondary bond market, renewed selling interest across the yields curve resulted in yields increasing on the maturities of 2022’s (i.e. 01.10.22 and 15.12.22), 2023’s (i.e. 15.05.23, 01.09.23 and 15.11.23), 2024’s (i.e. 15.09.24 and 01.12.24), 15.01.26 and 15.10.27 to weekly highs of 5.90%, 6.05%, 6.31%, 6.35%, 6.40%, 6.68%, 6.80%, 7.20%, and 8.00% respectively against its previous weeks closing level of 5.83/87, 5.85/95, 6.20/25, 6.20/30, 6.30/38, 6.55/65, 6.65/75, 7.05/20 and 7.50/70.

Meanwhile, foreign holding in rupee bonds remained steady at Rs. 6.20 billion for the week ending April 7, 2021.

The daily secondary market Treasury Bond/Bill transacted volumes for the first four trading days of the week averaged Rs.6.57 billion.

In money markets, the weighted average rates on overnight call money and repo remained mostly unchanged to average 4.64% and 4.66% respectively for the week as the total outstanding market liquidity was seen increasing during the week to a high of Rs.106.77 billion against its previous week of Rs.86.33 billion. The CBSL’s holding of Gov. Security’s too increased Rs.903.18 billion against its previous weeks of Rs. 844.02 billion.

(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)

Courtesy: Wealth Trust Securities Ltd