Bond yields decrease marginally ahead of weekly bills auction

By Wealth Trust Securities

The secondary bond market yields decreased marginally yesterday on the back of renewed buying interest with the liquid maturities of 2021’s (i.e. 15.10.21 & 15.12.21), 15.03.22, 15.03.23, 15.03.24 and 15.01.27 dipping to intraday lows 9.74%, 9.75%, 9.92%, 10.14%, 10.27% and 10.57% respectively against its previous day’s closing levels of 9.75/78, 9.76/80, 9.92/98, 10.15/22, 10.25/33 and 10.58/63.  

In addition, on the very short end of the curve, the 01.05.20 maturity was seen changing hands within the range of 8.75% to 8.80% while March and May 2020 bills were traded at levels of 8.74% to 8.82%.

At today’s auction, a total amount of Rs. 19 billion will be on offer, which will consist of Rs. 6 billion on the 91-day maturity, Rs. 4 billion on the 182-day maturity and a further Rs. 9 billion on the 364-day maturity. At last week’s auction, the weighted averages on the 91-day and 182-day maturities remained steady at 8.38% and 8.63% respectively while all bids received on the 364-day bill were rejected.

The total secondary market Treasury bond/bill transacted volumes for 14 June was Rs. 11.33 billion. 

In money markets, the Open Market Operations (OMO) Department of the Central Bank refrained from conducting any auctions yesterday as the overnight net liquidity surplus in the system stood at Rs. 12.22 billion. The overnight call money and repo rates averaged 7.97%.

 Rupee remains mostly unchanged

 In the Forex market, the USD/LKR rate on spot contracts remained mostly unchanged to close the day at Rs. 176.80/85 on the back of an equilibrium market.

The total USD/LKR traded volume for 17 June was $ 36.66 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 month – 177.50/70; 3 months – 179.00/20 and 6 months – 181.15/45.