Bond yields increase marginally on moderate volumes ahead of weekly bill auction

By Wealth Trust Securities

Secondary market bond yields increased marginally yesterday on the back of moderate selling interest. Yields of the liquid maturities consisting of the two 2021’s (i.e. 01.03.21 and 01.08.21), 15.03.23 and the 01.08.26 were seen increasing to intraday highs of 9.85%, 9.95%, 10.10% and 10.22% against its previous day’s closings levels of 9.73/80, 9.80/90, 10.00/02 and 10.10/10.

At today’s bill auction, a total amount of Rs. 28 billion will be on offer consisting of Rs. 3 billion, Rs. 5 billion and Rs. 20 billion of the 91day, 182 day and 364 day maturities respectively. At last week’s auction, the weighted average yields of the 91 day and 364 day bills decreased by two and six basis points respectively to 8.15% and 9.65%. The total secondary market Treasury bond/bill transacted volumes for 23 April was Rs. 4.5 billion.

Given below are the closing, secondary market yields of the most frequently traded T-bills and bonds.  Meanwhile, in money markets, overnight call money and repo rates averaged 7.84% and 7.88% respectively as the Open Market Operations (OMO) Department of the Central Bank drained out an amount of Rs. 15 billion on an overnight basis at a weighted average of 7.46%. The net surplus liquidity in the market increased to Rs. 23.61 billion.

 Downward trend in rupee continues

 In the Forex market, the USD/LKR rate on spot transactions dipped further to close the day at Rs. 157.20/30 against its previous day’s closing levels of Rs. 156.85/95 on the back of continued importer demand.

The total USD/LKR traded volume for 23 April 2018 was $ 42.25 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 month - 157.85/05; 3 months    -   159.40/60 and 6 months -  161.55/65