364 day bill WAvg dips for first time in 7 weeks as demand jumps to 13-week high

Thursday, 5 June 2014 00:06 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities The weighted average (WAvg) on the 364 day bill eased for the first time in seven weeks, reflecting a dip of one basis point (bp) to 7.01% at yesterday’s weekly Treasury bill auction as total bids received increased to a 13-week high of Rs. 43.8 b. Furthermore, WAvgs on the 91 day and 182 day bills dipped as well by one bp and two bp respectively to 6.55% and 6.73% respectively. The 364 day maturity continued to dominate the auction as it represented 82.9% of the total accepted amount of Rs. 19.09 b, which was Rs. 9.09 b higher

than the initial total offered amount of Rs. 10 b. In secondary bond markets, yields were seen decreasing leading to the auction and subsequent to the release of the auction results as markets remained bullish throughout the day. Activity mainly surrounded the two 2019 maturities (i.e. 1 July 2019 and 1 November 2019) and the 1 May 2021 as its yields were seen hitting intraday lows of 8.81%, 8.84% and 9.45% respectively against their previous day’s closing levels of 8.84/87, 8.86/92 and 9.50/52. In addition, the 1 September 2016 maturity, the two 2017s (i.e. 1 March 2017 and 15 May 2017), the two 2018s (i.e. 1 April 2018 and 15 August 2018) and the 1 July 2022 maturity were seen changing hands within the ranges of 7.41/45, 8.80/85, 8.84/90, 8.30/32, 8.36/38 and 9.88/90 respectively as activity remained high across the yield curve. In secondary bill markets, the 364 day bill was seen been quoted at levels of 6.95/97 subsequent to the auction results. Meanwhile in money markets, the total surplus of Rs. 6.68 billion was deposited at CBSL’s Standing Deposit Facility Rate (SDFR) of 6.50% as the Central Bank refrained from conducting any auctions under its Open Market Operations (OMO) yesterday. This in turn kept overnight call money and repo rates steady to average 6.97% and 6.52% respectively. Rupee gains to an 11-month high In Forex markets, the rupee was seen appreciating to an 11-month high of Rs. 130.30 yesterday on the back of selling interest on cash dollar contracts. The total USD/LKR traded volume for the previous day (3 June) stood at $ 60.75 million. Some of the forward dollar rates that prevailed in the market were: one month – 130.79; three months – 131.64; and six months – 132.83.