Bond yields decrease marginally ahead of weekly bill auction

Wednesday, 20 February 2019 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

Yields in the secondary bond market decreased marginally yesterday, consisting mainly of the liquid maturities of 01.08.21 and 15.12.2, to lows of 10.92% and 11.00% respectively, against its previous day’s closing levels of 11.00/07 and 11.00/10. Furthermore, the 01.05.20, 15.10.21, and 15.07.23, were seen trading at levels of 10.80%, 11.00% to 11.05% and 11.15% to 11.17%, while the two 2027’s (i.e. 15.01.27 & 15.06.27) and the 01.09.28 moved at levels of 11.40%, 11.43% and 11.47% respectively.

At today’s Treasury bill auction, a total amount of Rs. 22.5 billion will be on offer, consisting of Rs. 6 billion each of the 91 and 182 day maturities and a further Rs. 10.5 billion of the 364 day maturity. At last week’s auction, the weighted average yield of the 364 day bill increased by 03 basis points to 10.72% while all bids received for the 91 day and 182 day bills were rejected.

The total secondary market Treasury bond/bill transacted volumes for the 15th February 2019 was Rs.5.5 billion.

In the money market, the OMO Department of the Central Bank was seen infusing liquidity by way of an overnight and a seven day term repo auction for successful amounts of Rs. 17.75 billion and Rs. 17.40 billion respectively at weighted average yields of 8.94% and 8.92% as the net liquidity shortfall stood at Rs. 102.21 billion. The overnight call money and repo rates averaged 8.96% and 9.00%.

Rupee loses

The USD/LKR rate on spot depreciated considerably to close the day at levels of Rs. 179.85/00 against its previous day’s closing levels of Rs. 178.70/80 on the back of continued buying interest by banks.

The total USD/LKR traded volume for 15 February was $ 37.92 million.

Some of the forward USD/LKR rates that prevailed in the market were: 1 month - 180.70/90; 3 months - 182.70/00 and 6 months - 185.60/90.

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