Bond yields increase marginally ahead of weekly bill auction

By Wealth Trust Securities

The secondary bond market yields increased marginally yesterday on thin volumes, ahead of today’s weekly Treasury bill auction. 

At today’s auction, the total offered amount will reduce to a four-week low of Rs. 20.5 billion consisting of Rs. 8 billion and Rs. 12.5 billion on the 182 day and 364 day maturities respectively, with nothing being offered on the 91 day maturity.

At last week’s auction, the weighted average yield of the 182 day bill increased by seven basis points for the first time in four weeks to 9.01% while the 364-day maturity remained steady at 9.10%. The 91 day bill, which was offered after a lapse of four weeks, recorded a weighted average yield of 8.71%.

In the secondary bond market, very thin volumes of the 01.01.24, 01.08.24, 01.08.26 and 15.06.27 maturities were seen changing hands at levels of 10.26% each and 10.35% each respectively.

The total secondary market Treasury bond/bill transacted volumes for 29 September 2017 was Rs. 10.01 billion.

In money markets, the overnight call money and repo rates averaged 8.10% and 8.00% respectively as the OMO Department of the Central Bank of Sri Lanka was seen draining out an amount of Rs. 13.95 billion on an overnight basis by way a repo auction at a weighted average of 7.26%. The net surplus liquidity in the system stood at Rs. 22.65 billion.

Rupee losses marginally

 In the Forex market, the USD/LKR spot rate was seen losing marginally yesterday, to close the day at Rs. 153.10/20 against its previous day’s closing level of Rs.153.05/15 on the back of continued importer demand.

The total USD/LKR traded volume for 29 September 2017 was $ 62.20 million.

Some of the forward USD/LKR rates that prevailed in the market were one month - 154.00/20; three months - 155.55/75 and six months - 157.70/90.