Bond yields increase further ahead of weekly bills auction

Wednesday, 7 August 2019 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

Secondary market bond yields were seen increasing further yesterday ahead of today’s weekly Treasury bill auction. Selling interest saw yields on the maturities of two 2021’s (i.e. 01.08.21 & 15.10.21), 15.07.23, two 2024’s (i.e. 15.03.24 & 15.06.24) and 15.01.27 increasing to intraday highs of 8.65%, 8.80%, 9.48%, 9.82%, 9.85% and 10.00% respectively against its previous day’s closing levels of 8.58/68, 8.68/75, 9.38/43, 9.65/70, 9.70/74 and 9.87/00.

At today’s auction, a total amount of Rs. 18.5 billion will be on offer which will consist of Rs. 2.5 billion on the 91 day maturity, Rs. 1.5 billion on the 182 day maturity and further Rs. 14.5 billion on the 364 day maturity. At last week’s auction, the weighted averages decreased across the board by 4, 2 and 17 basis points respectively to 7.85%, 7.94% and 8.21%.

The total secondary market Treasury bond/bill transacted volumes for 5 August was Rs. 15.16 billion. In the money market, the OMO (Open Market Operations) Department of the Central Bank of Sri Lanka refrained from conducting any auction to drain out liquidity for a fifth consecutive day, despite the overnight net liquidity surplus standing at a high of Rs. 33.13 billion yesterday.

The overnight call money and repo rates averaged at 7.84% and 7.82% respectively.

Rupee dips below Rs. 177

In the Forex market, the USD/LKR rate on spot contracts continued its depreciating trend to dip below the psychological level of Rs. 177 and close the day at Rs. 177.55/65 against its previous day’s closing level of Rs. 176.90/00 on the back of continued buying interest by banks.

The total USD/LKR traded volume for 5 August was $ 118.37 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 month - 178.05/25; 3 months - 179.05/35 and 6 months - 180.70/10.

Stock market posts near 2-week closing low; rupee extends losses

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