Bond auction yields experience slight declines and full acceptance

By First Capital Research

Yesterday’s bond auction saw a slight decline in rates as the Central Bank raised Rs.27.5 billion, yielding full acceptance across both maturities offered. 

The 15.06.2029 maturity closed at a weighted average yield rate of 10.63 percent with Rs.15.0 billion being fully accepted, whilst the 15.12.2032 maturity closed at a weighted average yield rate of 11.41 percent, with Rs.12.5 billion being fully accepted. 

The secondary market yield curve witnessed slight buying interest and moderate volumes amidst the bond auction. Notable trades were amongst the 2028, 2029 and 2030 maturities. On the belly end of the curve, 15.02.28, 01.05.28, 01.07.28 and 01.09.28 traded at rates of 10.00 percent, 10.10 percent, 10.22 percent and 10.30 percent, respectively. Similarly, 15.06.29, 15.07.29 and 15.09.29 traded at rates of 10.65 percent, 10.70 percent and 10.70 percent, respectively. The 15.05.30 and 15.10.30 maturities traded at rates of 10.90 percent and 11.07 percent, respectively. 

On the external front, the LKR appreciated against the US dollar, closing at Rs.295.72/US dollar, compared to Rs.295.75/US dollar recorded the previous day. The Central Bank holdings of government securities remained unchanged, closing at Rs.2,511.92 billion yesterday. Overnight liquidity in the banking system expanded to Rs.171.62 billion, from Rs.151.07 billion recorded the previous day.