Secondary market bond yields decrease further ahead of weekly bill auction
Wednesday, 17 December 2014 00:00
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By Wealth Trust Securities
Activity in secondary bond markets picked up yesterday, as buying interest along the yield curve saw yields dip further ahead of today’s weekly Treasury bill auction.
The two 2018 maturities (i.e. 1 April 2018 and 15 August 2018) were seen hitting intraday lows of 6.95% and 7.00% respectively followed by the 1 July 2019 to a low of 7.05%, the 1 July 2022 to 7.82% and the 1 January 2024 to 7.94%. However, selling interest at these levels was seen curtailing the downward trend.
Today’s auction will see an total amount of Rs. 12 billion on offer consisting of Rs. 3 billion on the 182 day and Rs. 9 billion on the 364 day maturities. At last week’s auction, the weighted average on the 364 day bill decreased by one basis point for a second consecutive week to 5.98% while on the 182 day bill, the weighted average dipped by one basis point for the first time in five weeks to 5.83%. Furthermore in secondary bill markets, May 2015 bills were quoted at levels of 5.72/78 and the 364 day bill at 5.94/98.
The weighted averages on overnight call money and repo decreased to average 6.00% and 5.50% respectively as surplus liquidity increased marginally to Rs. 5.27 b yesterday. No auctions were conducted under Central Bank’s Open Market Operations (OMO) for a second consecutive day as well.
Rupee remains steady
In dollar rupee markets, the USD/LKR rate remained mostly unchanged for a second consecutive day at Rs. 131.99/01 as markets were at equilibrium. The total USD/LKR traded volume for 15 December was at $ 35.40 million.
Some of the forward dollar rates that prevailed in the market were: one month – 132.53; three months – 133.55; and six months – 134.85.
