Bond yields decrease ahead of weekly bill auction

By Wealth Trust Securities

The Secondary bond market yields were seen decreasing yesterday with the liquid maturities of 15.03.22, 15.03.23 and three 2024s (i.e. 01.01.24 and 15.06.24) hitting intraday lows of 9.07%, 9.25%, 9.63% and 9.64% respectively against its previous day’s closing level of  9.13/20, 9.30/35, 9.68/72 and 9.70/73. 

Furthermore, activity was also witnessed on the maturities of 2021s (i.e. 15.10.21 and 15.12.21), 2023s (i.e. 15.05.23 and 01.09.23) and 01.08.24 at levels of 8.95%, 9.35% to 9.42% and 9.70% to 9.78% respectively. In the secondary bill market, March 2020 maturities were traded within the range of 7.21% to 7.25%.

At today’s bill auction, a total amount of Rs. 29 billion will be on offer, consisting of Rs. 9 billion of the 91 day, Rs. 5 billion of the 182 day and Rs. 15 billion of the 364 day maturities. At last week’s auction, the weighted average yields on the 91 day and 364 day bill maturities decreased by two basis points each to 7.42% and 8.58% respectively while weighted average yield on the 182 day bill remained steady at 8.06%.

The total secondary market Treasury bond/bill transacted volume for 2 March 2020 was Rs. 7.66 billion. 

In money markets yesterday, the Domestic Operations Department (DOD) of the Central Bank of Sri Lanka was seen draining out liquidity by way of an overnight repo auction, with the net liquidity surplus in the system standing at Rs. 18.83 billion yesterday. It drained out an amount of Rs. 7 billion at a weighted average of 6.97%. The weighted average yields on the overnight call money and repo rates stood at 6.95% and 7.01% respectively. 

Rupee remains mostly unchanged  

In the Forex market, the USD/LKR rate on spot contracts closed the day mostly unchanged yesterday at Rs. 182.08/15 subsequent to dipping to an intraday low of Rs. 182.20.

The total USD/LKR traded volume for 2 March 2020 was $ 62.70 million.

Some of forward USD/LKR rates that prevailed in the market were one month - 182.60/80; three months - 183.60/90 and six months - 185.15/45.