Bond yields decrease further ahead of weekly bill auction

By Wealth Trust Securities

Secondary market bond yields were seen decreasing further yesterday on the back of continued buying interest ahead of today’s weekly Treasury bills auction. 

Activity was centred on the maturities of 01.05.20, 15.05.23, 01.08.26, 15.06.27 and 15.05.30 as its yields were seen decreasing to intraday lows of 9.60%, 10.05%, 10.20%, 10.25% and 10.52% respectively against its previous day’s closing levels of 9.67/77, 10.10/16, 10.20/30, 10.30/35 and 10.55/65. 

In addition, the 2021 maturities were seen changing hands within the range of 9.80% to 9.90% as well.

At today’s weekly Treasury bill auction, a total amount of Rs. 17.5 billion will be on offer consisting of Rs. 7 billion on the 182 day maturity and Rs. 10.5 billion the 364 day maturity. The 91 day bill will not be on offer for the first time in ten weeks. At last week’s auction, weighted averages continued their decreasing trend with the 91 day bill reflecting the highest drop of 23 basis points to 7.97%, closely followed by the 182 day bill decreasing by 12 basis points to 8.76% and the 364 day bill by 10 basis points to 9.34%.

The total secondary market Treasury bond/bill transacted volumes for 11  December 2017 was Rs. 2.92 billion.

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

In money markets, the overnight call money and repo rates remained steady to average 8.13% and 7.56% respectively as the Open Market Operations (OMO) Department of the Central Bank of Sri Lanka drained out an amount of Rs. 11.95 billion on an overnight basis by way of a repo auction at a weighted average of 7.25%. The net surplus in the system increased to Rs. 21.81 billion yesterday. 

 Rupee remains 

mostly unchanged

 In Forex markets, the USD/LKR rate on spot contracts remained mostly unchanged for a second consecutive day to close the day at Rs. 153.05/12.  The total USD/LKR traded volume for 11  December 2017 was $ 40.35 million.

 Given below are some forward USD/LKR rates that prevailed in the market, 

1 Month              -               154.12/15

3 Months             -              155.75/856 Months            -              158.45/55