364 day bill weighted average dips to lowest level since 1996

Thursday, 10 July 2014 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities Secondary market bond yields decline marginally Primary market weighted averages (WAvg) continued to decline at its weekly Treasury bill auction conducted yesterday with the WAvg on the 364-day bill dipping to its lowest level of 6.91% recorded since 1996 against its previous weeks WAvg of 6.97%.

This was closely followed by the 182-day bill as it reflected a dip of 05 basis points (bp) to 6.63% and the 91-day bill by 1 bp to 6.49%. As has been the trend, the 364-day bill continued to dominate the auction as it represented 85.65% of the total accepted amount of Rs. 26.37 billion against its total offered amount of Rs. 10 billion. Driven by the outcome of the weekly bill auction and expectations on the outcome of today’s bond auction, secondary market bond yields were seen dipping marginally yesterday. Activity centered on the liquid maturities of the two 2018’s (i.e. 1 April 2018 and 15 August 2018), the 1 July 2019 and the 1 July 2022 as its yields were seen hitting intraday lows of 7.85%, 7.90%, 8.12% and 9.10% respectively against its opening highs of 7.90/95, 7.98/02, 8.17/18 and 9.14/15. In addition, on the shorter end of the yield curve, the 1 November 2015 maturity was seen changing hands within the range of 6.92% to 6.95%, 2016’s within 7.00% to 7.05% and the 2017s with 7.40% to 7.45% while in secondary bill markets the 91-day bill was quoted at 6.50/55, May 2014 at 6.70/75 and the 364-day at 6.83/89. Meanwhile at today’s bond auction, the first in six weeks, a total of Rs. 4 billion will be on offer consisting of Rs. 2 billion each on the 1 January 2024 and 1 May 2029 durations ahead of an Rs. 92.52 billion bond maturity due on 15 July.Overnight call money and Repo rates remained steady to average 6.84% and 6.54% respectively as surplus liquidity increased once again to Rs. 28.87 billion yesterday. No Open market Operations (OMO) were conducted for a second consecutive day. Rupee gains marginally on export conversions and forward dollar sales The rupee was seen appreciating marginally to Rs. 130.23/25 yesterday on the back of export conversions and forward dollar sales against its previous day’s closing of Rs. 130.25/26. The total USD/LKR traded volumes for 8 July stood at $ 137.40 million. Some of the forward dollar rates that prevailed in the market were 1 Month: Rs. 130.48, 3 Months: Rs. 131.08 and 6 Months: Rs. 132.13.