The Government Securities Market (Week ended July 22, 2022)

23 July, 2022

The secondary bond market yields decreased considerably during the week ending 22nd July 2022, continuing the downward momentum witnessed over the later part of the previous week. The increase in demand at the weekly Treasury bills auction which saw weighted average rates decreasing across the board for the first time in five weeks coupled with an improvement in investor sentiment were seen as the reasons that led to the downward momentum.

Yields of the liquid maturities of 01.06.25 and 15.07.29 decreased to weekly lows of 24.82% and 24.50% respectively against its previous week’s closing levels of 27.00/75 and 27.75/25. In addition, 15.06.27 and 15.01.28 maturities traded at lows of 24.97% and 24.50% respectively as well while two-way quotes on the rest of the curve were seen decreasing to reflect a downward shift of the overall yield curve while in continues to remain inverted.

In the secondary Bill market, October 2022 and July 2023 maturities traded at lows of 28.00% and 28.50% respectively against its post auction highs of 31.00% and 29.50%.

The National Consumer Price Index (NCPI; Base 2013=100) for the month of June jumped to a high of 58.9% on its point to point against its previous month’s figure of 45.3%.

In money markets, the total outstanding liquidity deficit was registered at Rs.591.75 billion by the end of the week against its previous weeks of Rs.521.76 billion while the CBSL’s holding of Gov. Security’s stood at Rs.2,267.25 billion against its previous weeks of Rs.2,269.33 billion.

(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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