By First Capital Research
Weekly Yield movement & Volume
The secondary market remained dull during the week, witnessing a low level of activity. The yield curve remained relatively unchanged during the week, although the five-year maturity shifted slightly upwards by 8bps. Despite the continued foreign buying interest in Government Securities, the rupee witnessed a slight depreciation against the USD to close at Rs 179.70 compared to Rs 178.46 at the beginning of the week. At the primary bill auction held on 20 February 2019, the weighted average yield of the 1-year bill was seen increasing slightly up by 01 bps to 10.73 per cent, while all bids received for the three-month bill were rejected.
Liquidity & CBSL Holdings
CBSL market liquidity remained negative throughout the week, while the highest liquidity deficit for the week was recorded on 18 February, amounting to Rs 102.2 billion. Meanwhile, CBSL holdings increased towards the latter part of the week and recorded Rs 181.5 billion.
Foreign holding was recorded at Rs 165.9 billion, recording an increase of Rs 3.3 billion, while witnessing foreign buying in Government Securities for the fourth consecutive week. Foreign holding percentage for the week remained at 3.1 per cent.
Maturities for next Week
The Government Securities Market has a Treasury Bill maturity amounting to Rs 30.0 billion and a coupon payment of Rs 19.8 million, which needs to be settled on 01 March 2019.
Thursday (14.02.19): The overall yield curve remained mostly unchanged, while the market witnessed thin volumes amidst limited activity levels in the secondary market. Mixed activities were witnessed on [01.08.26] at 11.35 per cent, two 2027 maturities ([15.01.27] and [15.06.27]) at 11.40 per cent and [01.09.28] at 11.48 per cent.
Friday (15.02.19): Secondary market yield curve remained broadly unchanged to close the week at previous day’s levels with market witnessing thin volumes as market participants were seen remaining on the side-line while the USD: LKR opened the day at 178.50/60, prior to weakening slightly to close the week at 178.60/85.
Monday (18.02.19): The secondary market saw low activity levels, while the overall yield curve remained broadly unchanged from the previous week’s closing levels. Limited activities were witnessed in two 2021 maturities with mixed activities on [01.08.21] at 10.96-10.92 per cent levels and [15.12.21] traded at 11.00 per cent on the back of foreign selling, while the market witnessed thin volumes. CBSL has offered Rs 22.5 billion comprising all three maturities at Wednesday’s bill auction. During the day, USD:LKR was seen weakening to close at 179.80/05 from opening levels of 178.55/85.
Wednesday (20.02.19): The secondary market witnessed low volumes, while the overall yield curve remained broadly unchanged. [01.08.21] was seen trading at 11.00 per cent, while [01.08.26] traded at 11.30-34 per cent levels and [15.06.27] at 11.43 per cent.
Meanwhile, at the weekly bill auction, one-year T- Bill slightly increased to 10.73 per cent, while the yield for the six-month bill remained unchanged.