Bond auctions record impressive outcomes

By Wealth Trust Securities

The bond auctions conducted yesterday recorded bullish outcomes as its weighted averages were recorded well below its stipulated cut off rates, while the total offered amount of Rs. 25 billion was successfully accepted in the first phase of the auctions. The 15.11.2023 maturity recorded a weighted average rate of 6.35%, equal to its pre-auction rate of 6.35/38 and against its cut off rate of 6.40%. The 01.07.2028 fetched a weighted average rate of 8.00% against its cut off rate of 8.05%. The bids to offer ratio stood at 2.67:1. 

Nevertheless, activity in the secondary bond market remained at a standstill yesterday due to most market participants being on the side lines awaiting the auction outcome.

This is ahead of today’s bill auction, where in total an amount of Rs. 51 billion will be on offer, consisting of Rs. 8 billion on the 91-day, Rs. 23 billion on the 182-day and Rs. 20 billion on the 364-day maturities. The stipulated cut off rate on the 364-day maturity was increased by three basis points to 5.21% while the maximum yield rates of the 91-day and 182-day maturities will be decided below the level of the 364-day maturity at the auction. At last week’s auction, the weighted average on the 91-day bill increased by one basis point to 5.13%, while weighted averages on the 182-day and 364-day maturities remained steady at 5.14% and 5.18% respectively.

The total secondary market Treasury bond/bill transacted volume for 31 May was Rs. 3.63 billion.   

In money markets, the net liquidity surplus was recorded at Rs. 99.08 billion yesterday as an amount of Rs. 36.17 billion was withdrawn from Central Banks SLFR of 5.50%. However, the weighted average rates on call money and repo remained mostly unchanged at 4.70% and 4.74% respectively, as an amount of Rs. 135.24 billion was deposited at Central Banks SDFR of 4.50%.

USD/LKR   

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

The total USD/LKR traded volume for 31 May was $ 28.42 million.   

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