Bond yields edge up marginally ahead of weekly bill auction

Tuesday, 27 March 2018 00:00 - - {{hitsCtrl.values.hits}}

This week’s Treasury bill auction, to be held yesterday (26 March) due to a shortened trading week, will have on offer a total amount of Rs. 25.5 billion, consisting of Rs. 6 billion each of the 91 day and 182 day maturities and a further amount of Rs. 13.5 billion of the 364 day maturity. This will be the final primary auction for the tax year 2017/2018 which will carry the 10% W.H.T (With Holding Tax) on Government Securities. At last week’s auction, weighted averages of the 91 day and 364 maturities decreased by 15 and 04 basis points respectively to 8.17% and 9.66%, while all bids received for the 182 day bill were rejected for a fourth consecutive week.

In the secondary bond market yesterday, yields increased marginally on thin volumes with selling interest mainly on the maturities of 01.03.21, 01.05.21, 15.12.21 and 01.08.25, resulting in its yields hitting intraday highs of 9.90%, 10.05%, 10.00% and 10.25% respectively against its previous day’s closing levels of 9.83/88, 9.85/92, 9.87/92 and 10.17/25. In the secondary bill market, continued buying interest resulted in September 2018 and March 2019 maturities changing hands at levels of 8.62% to 8.64% and 9.45% to 9.70% respectively.

The total secondary market Treasury bond/bill transacted volumes for 23 March was Rs. 16.58 billion.

In money markets, the overnight call money and repo rates averaged at 8.15% and 7.63% respectively while the net surplus liquidity in the system stood at Rs. 29.49 billion. The OMO Department of the Central Bank of Sri Lanka drained out an amount of Rs. 22.45 billion on an overnight basis by way of a repo auction at a weighted average of 7.27%.

Rupee remains mostly unchanged

The USD/LKR rate on active spot contracts remained mostly unchanged yesterday to close the day at levels of Rs. 156.10/15 as markets were at equilibrium.

The total USD/LKR traded volume for 23 March was $52.65 million.

Some forward USD/LKR rates that prevailed in the market: 1 Month - 156.75/85; 3 Months - 158.40/50; 6 Months - 160.60/75.