The bearish to negative sentiment in the secondary bond market continued during the week ending September 3, as liquidity in the system turned negative to record its highest net shortfall since January 2004.
This sentiment was seen affecting the primary auctions as the total accepted amount at the Treasury Bond auctions was a minute 8.00% of its total offered amount or Rs. 4.00 billion against an offered amount of Rs. 50 billion. Furthermore, the weekly Treasury bill auction went undersubscribed for a seventh consecutive week as only 36.86% or Rs. 25.21 billion was accepted in total against a total offered amount of Rs. 68.5 billion.
The only activity witnessed during the week was on the short dated 15.03.22 maturity at levels of 5.90% to 5.908% while a 10th September bill changed hands at a level of 5.90% in the secondary bill market.
In money markets, liquidity was seen turning negative during the week to a staggering shortfall of Rs.181.72 billion by the end of the week against its previous week’s surplus of Rs.13.26 billion. This intern saw the weighted average rates on overnight call money and repo increasing marginally to average 5.87% and 5.80% respectively for the week against its previous weeks 5.77% and 5.75%.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)
Courtesy: Wealth Trust Securities Ltd