Bond weighted averages cross 11%

• An all-time high volume offered at the weekly Treasury Bill auction

By Wealth Trust Securities

The weighted average rates were seen increasing considerably at the Treasury bond auctions held yesterday, keeping with its recent trend, while only Rs. 80.09 billion was accepted in total against a total offered amount of Rs. 100 billion. 

The auction maturities of 15.12.23, 15.01.27 and 01.10.32 fetched weighted average rates of 9.36%, 11.14% and 11.23% respectively against its pre-auction rates of 8.75/15, 10.20/00 and 10.00/11.50 for similar maturities. The auctions conducted on 28 September for the maturities of 15.11.23 and 15.05.30 fetched weighted averages of 8.12% and 10.23% respectively.

The Phase 2 of the auction was opened for the 2023 and 2027 maturities while an issuance window of 20% of the offered amount on the 2032 maturity was opened until close of business of the day prior to settlement (i.e., 4:00 p.m. on 14.10.2021). 

This was ahead of today’s bill auction, where an all-time high volume of Rs. 85 billion will be on offer, consisting of Rs. 30 billion on the 91-day, Rs. 25 billion on the 182-day and Rs. 30 billion on the 364-day maturities. At last week’s auction, weighted average rates on the 91-day and 182-day maturities increased by 45 and 21 basis points respectively to cross 7%, and register 7.15% and 7.20%, while the weighted average rate on the 364-day increased by 27 basis points to 7.28%.

The secondary bond market activity remained dull, while two-way quotes were seen increasing and widening following the bond auction outcome. 

The total secondary market Treasury bond/bill transacted volume for 11 October was Rs. 0.1 billion.   

In money markets, the weighted average rates on call money and repo registered 5.92% and 5.93% respectively as the net liquidity deficit remained mostly unchanged at Rs. 43.01 billion yesterday. An amount of Rs. 131.61 billion was withdrawn from Central Banks SLFR of 6% against an amount of Rs. 88.44 billion that had been deposited at Central Banks SDFR of 5%. 

The Domestic Operations Department (DOD) of the Central Bank of Sri Lanka drained out an amount of Rs. 0.15 billion by way of a seven-day repo auction at a weighted average rate of 5.98%.

USD/LKR   

The Forex market remained inactive yesterday. The total USD/LKR traded volume for 11 October was $ 8 million.   

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