Weekly Yield movement & Volume
Bond market activity was high following last Wednesday’s (22) bill auction, which saw yields falling, but died down towards Monday. Activity again improved towards the bill auction on 29 November, on expectations of a further dip in rates due to high demand for shorter tenors. With the tight spreads that were prevailing between the 2-year to 10-year bonds, selling pressure mounted in the mid- to long-term bonds with yields rising by 5-10bps. The bond auction held on 29 November also followed a similar trend as yields rose.
Liquidity and CBSL Holdings
Market liquidity remained volatile over the past week, but remained around the LKR 20-30 billion mark, while the CBSL Holdings also registered an enormous deterioration on 29 November 2017.
Foreigners remained net foreign buyers for the 11th consecutive week, adding a further LKR 979 million to foreign holding. However, with the overall outstanding Government securities stock increasing, overall foreign holding percentage remained at 6.4% as at 22 November 2017.
Maturities for next week
The Government securities market has Treasury Bill maturities on LKR 21 billion, which need to be settled on 8 December 2017.