Bond yields decrease ahead of weekly bills auction

By Wealth Trust Securities 

Aggressive buying interest mainly on the maturities of 2023s, 2024s, 2026s and 2027s saw secondary market bond yields decreasing yesterday ahead of the weekly Treasury bill auction. 

The yields on the 15.07.23, 01.09.23, 15.06.24, 15.09.24, 01.08.26, 15.06.27 and 15.10.27 maturities decreased to intraday lows of 9.17%, 9.20%, 9.43%, 9.44%, 9.53%, 9.63% and 9.60% respectively against its previous day’s closing levels of 9.22/30, 9.30/35, 9.50/53, 9.50/55, 9.62/70, 9.67/72 and 9.69/72.  

In addition, 01.03.21, 15.12.23, 15.03.24, 01.06.26, 15.05.30 and 15.09.34 maturities were seen trading at levels of 8.60%, 9.30%, 9.45%, 9.57%, 9.85% and 9.95% respectively as well.

Meanwhile, in secondary bills, March 2020, June 2020 and January 2021 maturities changed hands at levels of 7.35%, 7.99% to 8.00% and 8.55% respectively.

Today’s auction will have on offer a total amount of Rs. 26.5 billion, consisting of Rs. 1 billion of the 91 day, Rs. 8 billion of the 182 day and Rs. 17.5 billion of the 364 day maturities. At last week’s auction, the 364 day bill weighted average yield increased by three basis points to 8.61% while the 182 day bill weighted average yield increased by two basis points to 8.15%. The 91 day bill, which was accepted after a lapse of one week, recorded a weighted average yield of 7.55% against its previous yield of 7.50%.

The total secondary market Treasury bond/bill transacted volume for 27 January 2020 was Rs. 6.8 billion.

Given below are the closing, secondary market yields of the most frequently traded T-bills and bonds.   

Meanwhile in money markets, the overnight call money and repo rates averaged at 7.47% and 7.50% respectively as the overnight net liquidity surplus in the system stood at Rs. 33.52 billion. The Domestic Operations Department (DOD) of the Central Bank of Sri Lanka drained out an amount of Rs. 9.70 billion at a weighted average of 7.50% by way of an overnight repo auction.

Rupee remains mostly unchanged 

 In the Forex market yesterday, the USD/LKR rate on spot contracts was seen closing the day mostly unchanged at Rs. 181.55/60 as markets were at equilibrium.

The total USD/LKR traded volume for 27 January 2020 was $ 129.70 million.

 The following are some forward USD/LKR rates that prevailed in the market: one month - 182.00/15, three months - 183.00/30 and six months - 184.55/85.