The downward momentum on the market favourite 91-day Treasury bill weighted average rates continued for a fourth consecutive week, accumulating a total drop of 90 basis points over the past four weeks. Furthermore, the weighted average rates on all three maturities decreased for a third consecutive week as the total offered amount was successfully accepted for a sixth consecutive week. In secondary market bills, January, February and May 2022 maturities were seen changing hands at lows of 7.00%, 7.25% and 7.78% respectively.
However, overall activity in the secondary bond market continued to remain dull during the week ending 21st November 2021 as yields were seen fluctuating within a narrow range on the back of limited trades.
The 2023s (i.e. 15.11.23 & 15.12.23), 2024’s (i.e. 15.03.24 and 01.12.24) 15.01.27, 15.05.30 and 15.03.31 maturities changed hands at levels of 8.80% each, 9.20%, 9.41% to 9.47%, 10.80%, 11.55% to 11.73% and 11.83% to 11.86% respectively.
This is ahead of Today’s Treasury bond auctions, where a total amount of Rs.30 billion will be on offer, consisting of Rs.15 billion each of a 15.03.2025 and a 15.05.2030 maturity. The weighted average yields at the bond auctions conducted on 11th November 2021 were 9.16%, and 11.91% for the maturities of 15.03.24 and 15.03.31 respectively. The direct issuance window was opened for both maturities as it was fully subscribed at its 1st Phase.
During the week, the National Consumer Price Index (NCPI) for the month of October was announced and it was seen crossing the psychological level of 8.00% on its point to point to reach a 47 month high of 8.3% while the Central Bank of Sri Lanka was seen holding its policy rates steady at 5.00% and 6.00% at its monitory policy announcement.
In money markets, the total outstanding liquidity deficit was seen increasing further during the week to reach Rs. 282.99 billion by the end of the week against its previous weeks of Rs.270.95 billion while The CBSL’s holding of Gov. Securities decreased to Rs.1,433.91 billion against its previous weeks of Rs.1,436.09 billion. The weighted average rates on overnight call money and repo was 5.92% and 5.97% respectively for the week
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)
Courtesy: Wealth Trust Securities Ltd