Bond auctions go undersubscribed

By Wealth Trust Securities

The total accepted amount at yesterday’s T-bond auctions decreased to 68.90%, following 100% subscription from its previous round of auctions, as only an amount of Rs. 82.68 billion was successfully taken up against a total offered amount of Rs. 120 billion. 

This in turn saw the second phase for the 01.02.26 and 01.05.28 maturities opened at its weighted average rates due to its offered amounts of Rs. 35 billion each not been fully subscribed at its first phase of the auction. 

Nevertheless, the offered amount of Rs. 30 billion on the 01.12.2024 maturity and Rs. 20 billion on the 15.03.31 maturity was fully subscribed at its first phase of the auction. The auction maturities of 01.12.24, 01.02.26, 01.05.28 and 15.03.31 registered weighted average rates of 6.87%, 7.47%, 8.17% and 8.86% respectively against its stipulated cut off rates of 6.90%, 7.50%, 8.20% and 8.90%. The bids to offer ratio stood at 1.59:1.

Furthermore, an issuance window of 20% each for the 01.12.24 and 15.03.21 maturities was opened following the announcement of the results, until close of business of the day prior to settlement (i.e. 4 p.m. on 30.07.2021) at the weighted average yield rates. 

Secondary bond market yields remained mostly unchanged yesterday as activity remained moderated. Limited trades were seen on the maturities of 01.10.23 and 15.11.23 at levels of 6.27% to 6.30% and 6.35% to 6.38% respectively.

The total secondary market Treasury bond/bill transacted volume for 28 July was Rs. 23.85 billion.   

In money markets, the weighted average rates on call money and repo averaged 5.12% and 5.14% respectively as an amount of Rs. 115.74 billion was deposited at Central Banks SDFR of 4.50%. Nevertheless, the net liquidity surplus was registered at Rs. 23.89 billion yesterday as an amount of Rs. 91.85 billion was withdrawn from Central Banks SLFR of 5.50%.

USD/LKR   

In Forex markets, the overall market continued to remain inactive yesterday.

The total USD/LKR traded volume for 28 July was $ 20.40 million.  

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