The secondary bond market witnessed renewed buying interest, mainly during the latter part of the week ending November 18, leading to a change in sentiment from a negative/bearish to positive.
The considerable reduction in money market liquidity coupled with the comments made by the Governor of CBSL was seen as the main reasons behind the change in sentiment.
The total outstanding liquidity deficit in money markets decreased considerably to Rs. 390.97 billion by November 18, against its previous weeks of Rs.504.75 billion while CBSL’s holding of Gov. Securities increased to Rs.2,559.61 billion against its previous weeks of Rs.2,440.75 billion.
The improvement in liquidity had a positive outcome on the weekly Treasury bill auction, as the weighted average rate on the 91-day Bill was seen decreasing for the first time in seven weeks while the total offered amount was accepted at the first phase of the auction.
In the secondary bond market, buying interest on the liquid 15.01.28 maturity saw its yield dip to a weekly low of 32.23% against its weekly high of 33.10%. In addition, maturities of 01.07.25 and 01.07.32 traded at levels of 33.00% and 30.47% to 30.85% respectively while in secondary bills, December 2022 changed hands at level of 30.00% to 31.00% as well.
(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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