Bond yields increase ahead of weekly Treasury bill auction

Wednesday, 21 February 2018 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The secondary bond market yields were seen closing the day higher yesterday following a marginal dip in morning hours of trading.

Buying interest during morning hours of trading saw yields on the maturities 01.05.20, 01.03.21 and the two 2026’s (i.e. 01.06.26 and 01.08.26) dip to intraday lows of 9.60%, 9.73%, 10.23% and 10.20% respectively. However, selling interest towards the latter part of the day saw yields increase on the two 2026’s (i.e. 01.06.26 and 01.08.26) and 15.05.30 to highs of 10.35% each and 10.51% respectively. Furthermore, the 2024 maturities were seen changing hands within the range of 10.25% to 10.28% as well.

In the secondary bill market, April and November 2018 bills were seen changing hands at levels of 8.15% and 9.00% respectively.

This was ahead of Today’s Treasury bill auction where a total amount of Rs.30 billion will be on offer consisting of Rs.9 billion of the 91 day maturity, Rs.10 billion of the 182 day maturity and Rs.11.0 billion on the 364 day maturity. At last week’s auction, weighted averages spiked by 27, 30 and 34 basis points on the three maturities to 8.02%, 8.29% and 9.28% respectively.

The total secondary market Treasury bond/bill transacted volumes for 19 February 2018 was Rs.1.60 billion.

In money markets, the overnight call money and repo rates averaged 8.14% and 7.59% respectively as the net surplus liquidity in the system stood at Rs.14.32 billion yesterday.

The Open Market Operations Department of the Central Bank of Sri Lanka drained out an amount of Rs.12.00 billion by way of two repo auction at weighted averages of 7.25% and 7.35% respectively for periods of overnight and seven days.

Rupee dips further

In the Forex market, the USD/LKR on spot contracts depreciated further to close the day at Rs.155.40/50 against its previous day’s closing levels of Rs.155.35/45, on the back of continued importer demand.

The total USD/LKR traded volume for 19 February 2018 was $ 43.00 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 Month - 156.15/30; 3 Months - 157.85/00 and 6 Months - 160.30/45.

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