Government Securities Market Week ended August 27, 2021

29 August, 2021

The secondary bond market sentiment closed the week ending 27th August 2021 on a bearish note as activity was seen moderating considerably towards the later part of the week. The limited activity witnessed during the week predominantly centered on the 15.11.23 and 2024 (i.e. 15.09.24 & 01.12.24) maturities as its yields were seen hitting highs of 7.00%, 8.05% and 8.12% against its previous weeks closing level of 6.70/80, 7.50/80 and 7.80/90.

Monday’s (August 30) Bond auctions will have on offer an amount of Rs.50 billion in total, consisting of Rs. 30 billion ofthe 01.09.2023 maturity and Rs. 20 billion of the 15.10.2025 maturity. The maximum yield rate for acceptance for the said maturities was published at 6.75% and 8.55%.

The weighted average yields at the bond auctions conducted on June 29, 2021, before the monetary policy adjustment were 6.87%, 7.47%, 8.17% and 8.86% for the maturities of 01.12.24, 01.02.26, 01.05.28 and 15.03.31. The second phase of the auction was opened for the undersubscribed maturities while a direct issuance window was opened for the subscribed maturities.

Meanwhile, the weekly Treasury Bill auction conducted during the week, the first after the monetary policy announcement, saw its subscription level increase to 66.05% of its total offered amount whilethe weighted average rates increased across the board by54, 56 and 61 basis points to 5.87%, 5.90% and 5.93%.

In money markets, the Domestic Operations Department (DOD) of Central Bank drained out liquidity during the week on an overnight basis at weighted average yields ranging from 5.71% to 5.74% as the total outstanding liquidity surplus increased to Rs.13.26 billion by the end of the week from its previous weeks Rs. 9.15 billion. The weighted average yields on overnight call money and repo rates averaged 5.77% and 5.75% for the week.

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

Courtesy: Wealth Trust Securities Ltd

– Sunday Observer Sri Lanka

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