364-day bill WAvg dips below 6% for the first time in history

Thursday, 25 September 2014 00:56 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities As predicted and driven by the outcome of Tuesday’s monitory policy announcement, the weighted average (WAvg) at yesterday’s weekly Treasury bill auction on its 364 day maturity was seen dipping below 6% for the first time in history to record 5.89%, reflecting a drop of 37 basis points against its previous week.

However, all bids received for the 182-day maturity was rejected while the 91-day maturity was not on offer. Interestingly, the accepted amount on the 364-day maturity was more than double its initial offered amount of Rs. 5 billion, which intern saw Central Bank accepting Rs. 5.4 billion more than its initial total offered amount of Rs. 7.5 b. In secondary bond markets yesterday, the decreasing trend in yields witnessed during the early hours of trading came to halt subsequent to the release of the auction results on the back profit taking. The liquid maturities of 2018s (i.e. 1 April 2018 and 15 August 2018) were seen dipping to intraday lows of 6.40% each against its days opening highs of 6.50% and 6.58% respectively, the two 2019s (i.e. 1 July 2019 and 15 September 2019) to lows of 6.48% and 6.65% respectively against its highs of 6.65% and 6.75%, the 1 May 2021 to a low of 7.10% against its high of 7.20%, the 1 July 2022 to a low of 7.22% against its high of 7.38% and the two 2029s (i.e. 1 January 2029 and 1 May 2029) to lows of 8.80% each against its highs of 8.95%. Meanwhile in secondary market bills, the 364 day bill was seen quoted at levels of 5.70/90 post auction. In money markets, surplus liquidity continued to remain high at Rs. 41.49 billion yesterday as call money and repo rates were seen averaging 6.42% and 6.20% respectively.

Rupee appreciates marginally In dollar/rupee markets, the rupee was seen gaining to Rs. 130.29/30 yesterday against its previous day’s closing of Rs 130.32/36 on the back of inward remittances. The total USD/LKR traded volume for 23 September was at $ 69.80 million. Some of the forward dollar rates that prevailed in the market were: one month – 130.72; three months – 131.35; and six months – 132.32.