Government Securities Market (Week ended October 28, 2022)

30 October, 2022

The overall activity levels in the secondary Bill and Bond markets remained muted while sentiment remained dull as well during the short trading week ending October 28 as most market participants persisted to stay on the side-lines.

The two Treasury Bond auctions conducted on Friday saw only Rs 18.14 billion been accepted in successful bids against a total offered amount of Rs 30 billion.

The 3-Y maturity of 01.07.2025 recorded a weighted average rate of 32.63% while the 5-Y maturity of 15.01.2028 fetched a weighted average rate of 31.78% against its previous day’s closing rates of 32.00/75 and 31.00/75. Phase II of the auction was opened for the undersubscribed 3-Y maturity whereas the direct issuance window of 20% will be on offer on the fully subscribed 5-Y maturity until close of business of the day prior to settlement (i.e.,4.00 pm on 31.10.2022).

The total accepted amount at the weekly Treasury Bill auction increased to 87.06% of the total offered amount while weighted average yields remaining unchanged for a second consecutive week. A further amount of Rs.4.18 billion was raised at its phase II as well.

In secondary markets, limited trades were seen on the 15.01.28 and 15.07.29 bond maturities at levels of 31.10% each and January-April 2023 bill maturities at levels of 32.00% to 32.60% prior to Friday’s bond auctions while the 01.07.25 maturity was traded at 32.75% following the auction outcome.

In money markets, the weighted average rate on overnight repo was at 15.50% for the week while the total outstanding market liquidity deficit decreased to Rs.499.22 billion by the end of the week against its previous weeks of Rs.501.17 billion. Furthermore, the Domestic Operations Department (DOD) of the Central Bank of Sri Lanka injected an amount of Rs.80 billion by way of a 31-day Reverse Repo auction at a weighted average rate of 31.06%.

(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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