Published on Ceylon Today | 2017-10-11
By First Capital Research
The market registered moderate trading activity in mid tenors, recording buying interest led by 2021 & 2025 maturities as yields dipped by 5bps amidst foreign buying. Shorter tenors stayed broadly flat throughout the week, following a steep rise in yield in last Tuesday’s (3) bill auction where 1 Year Bills surged to 9.32% as against 9.10% the previous week.
Liquidity & CBSL holdings
CBSL Holdings saw a slow rise during the week, followed by the funding gap created last week with Rs 23 billion maturities and acceptance in the bill auction falling to Rs 13 billion. In line, the system also experienced a rise in liquidity towards Friday and Monday. However, a sudden dip in liquidity was noted on Tuesday (10).
Foreign interest in Government securities has been relatively steady during the past few weeks, while last week the market also experienced a net foreign inflow of LKR 2 billion marginally, increasing the foreign holding to 6.02% from 6.00% in the previous comparative week.
Maturities for the week
The Government securities market has Treasury Bill maturities on LKR 23 billion, which needs to be settled on 13 Oct 2017. Further, the Government also needs to settle LKR 2.8 billion of Treasury Bond interest due 15 Oct 2017, which will be settled on 13 Oct 2017, the last working day for settlement.