Weekly Government Securities Market Weekly Yield movement & Volume – 11/01/2018

Ceylon Today | 2018-01-11

Bond market activity remained relatively high during the past week, following the last Bill auction held on 3 January 2018, but showed some slowdown in the upward movement in yields on Wednesday (10), where the market witnessed steep buying interest, specifically in the short to mid tenures, on expectations of a dip in rates in the bill auction.

Liquidity & CBSL Holdings

Market liquidity reminded volatile over the last week remained around Rs 13-57 billion, while CBSL Holdings registered low throughout the week. However, a sudden increase in CBSL holdings was witnessed, coupled with increases in market liquidly on 3 January 2018, which could be linked to Government loan settlement during that week.

Foreign Interest

Foreigners remained net sellers for the first time after 16 consecutive weeks of foreign buying in Government securities. However, the overall outstanding Government securities foreign holding percentage dipped to 6.5% as at 3 January 2018.

Maturities for next week

The Government securities market has Treasury Bill maturities on Rs 21 billion, which needs to be settled on 19 Jan 2018. Further, the Government also needs to settle Rs 3.8 billion of Treasury Bond interest falling due on 15 Jan 2018, which will be settled on 12 Jan 2018, the last working day for settlement.