Bond market turns bullish

The fresh trading week commenced on a bullish note following the Presidential Election outcome, as secondary market bond yields nosedived yesterday on the back of increased activity levels and a jump in volumes. Foreign and local buying interest saw yields on the maturities of 2023’s (i.e., 15.03.23, 15.05.23, 15.07.23 and 15.12.23), 2024’’s (i.e. 15.03.24, 15.06.24 and 15.09.24) and 15.10.27 decrease to intraday lows of 9.35%, 9.50% each, 9.55%, 9.80%, 9.77%, 9.80% and 10.08% respectively against its opening highs of 9.50%, 9.62%, 9.66%, 9.70%, 9.93%, 9.95%, 10.00% and 10.30%.

Furthermore, a limited amount of activity was witnessed on the 2021’s (i.e.15.10.21 and 15.12.21), 01.10.22, 01.09.23, 01.08.24, 01.08.26 and 15.06.27 maturities at levels of 8.69% to 8.74%, 9.10%, 9.57% to 9.65%, 9.80% to 9.95% and 10.15% respectively.

In secondary bills, May and November 2020 maturities were seen changing hands at 7.70% and 8.47% to 8.50% respectively.

In money markets, the overnight call money and repo rates averaged 7.52% and 7.59% respectively as the Open Market Operations (OMO) Department of Central Bank was seen injecting an amount of Rs.15 billion by way of an overnight Reverse repo auction at a weighted average rate of 7.53%.

It further injected an amount of Rs. 387 million for Standalone Primary Dealers by way of an overnight reverse repo auction at a weighted average rate of 7.58%. The overnight net liquidity surplus in the system stood at Rs. 7.86 billion yesterday.

Rupee appreciates

In the Forex market, the rupee on spot contracts was seen appreciating considerably yesterday to close the day at Rs. 179.50/60, a level last seen in early September. This was subsequent to trading within an intraday low of Rs. 180.15 and high of Rs. 179.50 and against its previous trading day’s closing of Rs. 180.25/30.

The total USD/LKR traded volume for 15 November was $ 75.66 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 month – 179.95/15; 3 months – 181.05/35 and 6 months – 182.90/10.

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