In the secondary bond market, the bearishto negative sentiment continued during the week ending 10th September 2021 as yields continued to increase on the back of sporadic activity. Selling interest across the curve led to yields on the maturities of 15.03.23, 01.12.24, 15.01.26, 01.05.29, 15.05.30 and 15.09.34 increasing to highs of 6.80%, 8.27%, 9.00%, 10.23%, 10.10% and 10.45% respectively.
Meanwhile, the weighted average yields at the weekly Treasury bill auctions continued to increase, with the 91 day and 364 day maturities increasing above 6.00% for the first time since June 17, 2020. The auction went undersubscribed for an eight consecutive week as only 48.10% was accepted in total against a total offered amount.
The Treasury Bond auctions scheduled for tomorrow (September 13, 2021) will see in total an amount of Rs.50 billion on offer, consisting of Rs. 22.5 billion of the 15.06.2024 maturity and Rs.27.5 billion of the 15.03.2031 maturity. Maximum yield rates for acceptance were published as 8.10% and 10.10% respectively. The total accepted amount at the bond auctions conducted on 30th August 2021 for the maturities of 01.09.2023 and 15.10.2025 was a meager 8.00% of its total offered amount while the weighted average rates were recorded at its stipulated cut off rates of 6.75% and 8.55%.
In money markets, the net liquidity shortfall decreased to Rs.162.78 billion against its previous weeks Rs.181.72 billion while the weighted average rates on overnight call money and repo increased marginally to average 5.95% and 5.87% respectively for the week.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)
Courtesy: Wealth Trust Securities Ltd