Government Securities Market Weekly Report

Ceylon Today | 2017-11-01

Weekly Yield movement & Volume

Bond market activity remained relatively high during the past week following the last Bill auction held on the 25 Oct 2017 illustrating a slowdown in the upward movement in yields. However, mid to long term yield saw marginal upward movement (5 bps) before the end of the week. Heavy slowdown in activity was witnessed on Monday ahead of the Bond Auction. The shorter week resulted in the Bill auction being held on Tuesday where market witnessed steep buying interest specifically in the short to midtenures on expectations of a dip in rates in the bill auction following the bond auction rates which fell in line with the market rates.

Liquidity & CBSL Holdings

Market liquidity remained volatile over the past week but remained around the LKR 30 billion mark while the CBSL Holdings also registered a slow deterioration. However, a sudden drop in market liquidity coupled with a jump in CBSL Holdings was witnessed on 31 Oct 2017 which could be linked to a sizable outflow for the Government.

Foreign Interest

Foreigners remained net foreign buyers for a 7th consecutive week adding a further LKR 3 billion to foreign holding. However, with the overall outstanding Government securities stock increasing overall foreign holding percentage remained at 6.2% as at 25 Oct 2017.

Maturities for the Week

The Government securities market has Treasury Bill maturities on LKR28Bn which needs to be settled on 5 November 2017.