Government Securities Market (Week ended November 19, 2021) | Sunday Observer

Government Securities Market (Week ended November 19, 2021)

21 November, 2021

The overall activity in the secondary bond market moderated during the week ending 19th November 2021 as yields were seen fluctuating within a narrow range on the back of thin volumes. The limited activity centered on the 15.01.27, 01.09.28 and 15.03.31 maturities as its yields were seen changing hands at levels of 10.80% to 10.88%, 11.40% to 11.44% and 11.82% to 11.91% respectively against its previous weeks closing levels of 10.88/00, 11.50/60 and 11.85/92. In addition, 2024’s (i.e.15.03.24, 15.09.24 and 01.12.24) and 15.01.26 were seen trading at levels of 9.22% to 9.25%, 9.45%, 9.50% and 10.43% to 10.44% as well.

At the weekly bill auction, the weighted average rate of the market favorite 91 day bill decreased further for a third consecutive week to 7.77%, amassing a total dip of 66 basis points over the past three weeks while the total offered amount at the auction was fully subscribed for a fifth consecutive week. The demand was also witnessed in the secondary bill market with February 2022 maturities changing hands at a low of 7.47% during the week.

In money markets, the weighted average rates on call money and repo remained mostly unchanged at 5.92% and 5.96% respectively for the week as a high volume exceeding Rs. 300 billion was withdrawn on a daily basis during the week from Central Banks SLFR of 6.00%. The total outstanding liquidity deficit continued to increase during the week to Rs. 270.95 billion by the end of the week against its previous week’s of Rs. 249.70 billion.

However, the Domestic Operations Department (DOD) of Central Bank was seen draining out liquidity during the week by way of overnight to 7 day repo auctions at weighted average yields ranging from 5.95% to 5.99% while an average of Rs.75.48 billion was deposited throughout the week at Central Banks SDFR of 5.00%. The CBSL’s holding of Gov. Securities was registered at Rs.1,436.09 billion against its previous weeks of Rs.1,447.73 billion.

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

Courtesy: Wealth Trust Securities Ltd