Bond yields continue to increase ahead of weekly bill auction

By Wealth Trust Securities 

The secondary bond market yields increased further yesterday on the back of continued selling interest ahead of today’s weekly Treasury bill auction. Yields on the maturities of 15.12.23, 15.03.25, two 2026’s (i.e. 01.06.26 & 01.08.26) and 15.06.27 were seen increasing to intraday highs of 11.30%, 11.46%, 11.48%, 11.50% and 11.49% respectively against its opening lows of 11.26%, 11.42%, 11.41%, 11.43% and 11.45%. 

Furthermore, the two 2021 maturities (i.e. 01.03.21 & 15.12.21), 01.07.22, 15.07.23, 01.08.24 and 01.09.28 were also traded at levels of 10.70% to 10.72%, 10.80% to 10.84%, 10.98% to 11.00%, 11.30%, 11.38% and 11.52% to 11.53% respectively while December 2018 and January bill maturities were seen changing hands at levels of 10.50% and 10.58% respectively as well in the secondary bill market.

Today’s bill auction will have on offer a total amount of Rs. 23.5 billion consisting of Rs. 5 billion of the 182-day and Rs. 18.5 billion of the 364-day maturities. At last week’s auction, the weighted average yields decreased to 9.87% and 10.75% respectively on the 182-day and 364-day maturities.

The total secondary market Treasury bond/bills transacted volume for 21 January was Rs. 5.8 billion. 

In the money market, the overnight call money and repo rates averaged 9.00% and 8.99% respectively as the OMO Department of Central Bank was seen infusing liquidity by way of an overnight reverse repo auction for a successful amount of Rs. 40 billion at a weighted average yield of 9.00%. The net liquidity shortfall reduced to Rs. 129.13 billion yesterday.

 

 Rupee dips further

The USD/LKR rate on spot contracts was seen depreciating further yesterday to close the day at Rs. 182.10/20 against its previous day’s closing of Rs. 181.75/85 on the back of continued buying interest by banks. 

The total USD/LKR traded volume for 21 January was $ 100.07 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 Month – 183.00/30; 3 Months – 184.85/15 and 6 Months – 187.70/10.