Bond yields edge up marginally ahead of weekly bill auction

Wednesday, 27 March 2019 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The secondary market bond yields were seen increasing marginally yesterday on the back of moderate trading. The liquid maturities of 15.03.24 and 01.05.29 were seen hitting intraday highs of 11.05% and 11.46% respectively against its previous day’s closing levels of 10.99/04 and 11.40/45. In addition, 01.05.20, 01.08.21, 15.07.23 and 15.06.27 maturities were seen changing hands at levels of 10.41%, 10.69% to 10.70%, 10.95% and 11.35% respectively as well.

Today’s Treasury bill auction will see an total amount of Rs. 25 billion on offer consisting of Rs. 2.5 billion each on the 91 day and 182 day bills and a further Rs. 20 billion on the 364 day bill. At last week’s auction, weighted averages were seen decreasing to 9.49%, 9.79% and 10.52% respectively. In the secondary bill market, November and December 2019 bills were traded at levels of 9.85% and 10.25% respectively while January and February 2020 bills changed hands within the range of 10.28% and 10.34%.

The total secondary market Treasury bond/bill transacted volumes for 25 March was Rs. 2.00 billion.

In money markets, the overnight call money and repo rates averaged 8.63% and 8.68% respectively as the Open Market Operations (OMO) department of the Central Bank of Sri Lanka injected amounts of Rs. 10.0 billion, Rs. 3.5 billion and Rs. 1.5 billion on an overnight, seven day and fourteen day basis at weighted averages of 8.69%, 8.60% and 8.52% respectively. The overnight net liquidity shortfall in the system increased to Rs. 12.74 billion yesterday.

Rupee appreciates

In the Forex market, the USD/LKR rates on spot contracts appreciated yesterday to close the day at Rs. 177.40/55 against its previous day’s closing of Rs. 178.15/25 on the back of export conversions and selling interest by banks.

The total USD/LKR traded volume for 25 March was $ 91.84 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 month - 178.30/60; 3 months - 180.15/45 and 6 months - 182.90/30.