Bond yields edge up in thin trade ahead of weekly bill auction

By Wealth Trust Securities

The upward tick in bond yields resumed at the start of another fresh week on the back of very limited volumes changing hands. 

Selling interest on the 01.05.21, 15.03.23 and 01.09.28 maturities saw their yields increase to intraday highs of 10.10%, 10.48% and 10.65% respectively against its opening quotes of 10.05/10, 10.40/45 and 10.60/65. In addition, on the short end of the yield curve the 01.07.19 and 15.09.19 maturities changed hands within the range of 9.82% to 9.95% as well. 

Today’s weekly Treasury bill auction will have on offer a total amount of Rs. 28 billion consisting of Rs. 6 billion each on the 91 day and 182 day bills and a further Rs. 16 billion on the 364 day bill. All bids for the 91 day and 182 day bills were rejected at last week’s auction while the total offered amount of Rs. 28 billion was accepted only on the 364 day bill with its weighted average increasing by two basis points to 9.61%.  

The total secondary market Treasury bond/bill transacted volume for 4 May 2018 was Rs. 11.007 billion. The net surplus liquidity in the system was seen increasing to Rs. 15.96 billion yesterday as call money and repo remained steady to average 7.90% and 7.99% respectively. Furthermore, an amount of Rs. 7.54 billion was drained out on an overnight basis at a weighted average of 7.50% by the OMO Department of Central Bank by way of a repo auction. 

 Rupee remains steady

The USD/LKR rate on spot contracts closed the day mostly unchanged at Rs. 157.60/80 as markets were at equilibrium.

The total USD/LKR traded volume for 4 May 2018 was $ 27.38 million. 

Some of the forward USD/LKR rates that prevailed in the market were one month - 158.30/45; three months - 159.80/00 and six months - 162.00/20.