Secondary Bond market yields continue downward trajectory; shorter tenors rally

@ T-Bill rates hold steady for the 22nd week; auction undersubscribed @ Rupee depreciates

- By WEALTH Trust SECURITIES

THE secondary Bond market yesterday saw yields continue to decline with the shorter 2028 tenors rallying strongly. Robust demand was observed pushing rates down notably on those maturities. This resulted in a steepening of the yield curve. With shorter tenors repricing downwards, the curve increasingly reflected scope for further compression as traders pursued elevated term premiums further along the curve.

This dynamic saw demand spill over to the rest of the yield curve, which followed suit and registered declines in yields as well, albeit modestly. Activity and transaction volumes were seen increasing further as market sentiment was buoyed by news that the Executive Board of the International Monetary Fund is scheduled to meet on 19 December to consider Sri Lanka’s request for a $ 200 million facility under the Rapid Financing Instrument.