Weekly W. Avgs continue to dip considerably ahead of bond auctions
Thursday, 26 March 2015 00:35
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By Wealth Trust Securities
Weekly weighted averages (W. Avgs) continued their downward spiral at yesterday’s auction as well for a second consecutive week across all three maturities.
The 91 day and 364 day maturities reflected dips of 19 basis points (bp) each to 6.60% and 6.80% respectively, closely followed by the 182 day maturity by 17 bp to 6.70%. The 364 day maturity continued to dominate the auction as it represented 50% of the total accepted amount of Rs. 21.5 billion, which was Rs. 5.5 billion higher than the initial total offered amount of Rs. 16 billion. Table 1 gives details of the auction.
Meanwhile in secondary bond markets, yields were seen dipping as well across the yield curve leading to the auction. Activity centered on the 15.05.2017 maturity within a daily low and high of 7.75% to 7.90%, the two 2018s (01.04.2018 & 01.06.2018) within 8.20% to 8.25% and 8.35% to 8.52% respectively, the 15.09.2019 within 8.70% to 8.80%, the 01.08.2021 within 8.85% to 9.00% and the 01.09.2023 within 9.60% to 9.66%.
However, profit-taking following the outcome of the auction curtailed any further downward movement. Today’s bond auction will see a total amount of Rs. 30 billion on offer consisting of Rs. 10 billion on a 4.06 year maturity of 15.09.2019 and Rs. 20 billion on a 8.05 year maturity of 01.09.2023. Table 2 shows the closing, secondary market yields for the most frequently traded maturities.
In money markets, the downward trend in overnight call money and repo rates continued to average 6.57% and 6.69% respectively in comparison to its previous days weighted averages of 6.67% and 6.71% as surplus liquidity remained high at Rs. 97.30 billion yesterday.
Rupee appreciates marginally
In dollar/rupee markets, the rupee on the two-week forward contract was seen changing hands within a narrow range of Rs. 133.75 to 133.77 and closed the day marginally stronger at Rs. 133.70/80 in comparison to its previous day’s closing level of Rs. 133.75/80. The total USD/LKR traded volume for 24 March 2015 was at $ 25.25 million.
Some of the forward USD/LKR rates that prevailed in the market were 1 Month - 134.10; 3 Months - 135.35 and 6 Months - 137.10.
