Accepted volume at weekly auction dips to a 6-week low

Thursday, 12 November 2020 02:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The weekly Treasury bill auction conducted yesterday saw its total accepted amount drop down to a six-week low as only Rs. 9.19 billion was accepted against its total offered amount of Rs. 40 billion.

The weighted average rates were recorded at its stipulated cut off rates of 4.60%, 4.70% and 4.97% on the 91-day, 182-day and 364-day maturities respectively, while the bids-to-offer ratio decreased to 1.12:1.

Activity in the secondary bond market moderated once again yesterday, as most market participants were seen on the sidelines ahead of today’s Treasury bond auctions. A limited amount of trades consisting of the 15.12.23, 01.05.25 and 15.05.30 maturities were witnessed at levels of 6.00% to 6.05%, 6.45% to 6.46% and 7.48% to 7.57% respectively. In addition, January, June, July and October 2021 Treasury bill maturities changed hands at levels of 4.54%, 4.80%, 4.83% and 4.94% respectively in the secondary bill market as well.

Today’s Treasury bond auction will see in total an amount of Rs. 75 billion on offer, consisting of Rs. 40 billion of 01.12.2024 and Rs. 35 billion of 15.08.2027. Stipulated cut-off rates for the said maturities are 6.33% and 7.02% respectively. The weighted average yields at the bond auction conducted on 28 September were 5.65% and 6.59% for the maturities of 15.11.2022 and 01.03.2026 respectively, while only a total amount of Rs. 32.69 billion was accepted against a total offered amount of Rs. 75 billion.

In the money market, overnight surplus liquidity was recorded at Rs. 153.05 billion yesterday, while call money and repo averaged 4.54% and 4.57% respectively. The DOD (Domestic Operations Department) of Central Bank injected an amount of Rs. 10 billion by way of a 14-day reverse repo auction at a weighted average rate of 4.55%, valued today.

Rupee remains mostly unchanged

In the Forex market, USD/LKR rate on spot contracts was seen closing the day mostly unchanged at Rs. 184.55/60 yesterday, subsequent to changing hands within the range of Rs. 184.58 to Rs. 184.65.

The total USD/LKR traded volume for 10 November was $ 38.75 million.

(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)