Bond yields mostly unchanged ahead of Treasury bond auctions

By Wealth Trust Securities 

The secondary bond market yields remained mostly unchanged yesterday with limited trades seen ahead of today’s Treasury bond auctions.

Today’s Treasury bonds auction, in lieu of the 01.11.2019 Treasury bond maturity of Rs. 55 billion, will have in total the exact volume on offer consisting of Rs. 40 billion on a new 7 year and 11 month maturity of 15.10.2027 and Rs. 15 billion on a 19 year and 9 month maturity of 15.08.2039.  The weighted average yields at the previous auctions conducted on 11 October for the maturities of 15.03.23 and 15.05.30 were recorded at 9.65% and 10.46% respectively. 

In the secondary bond market, the maturities of 01.05.20, 2021’s (i.e. 01.03.21 & 15.12.21), 01.10.22, 2023’s (i.e. 15.05.23 & 15.12.23), 2024’s (i.e. 15.06.24 & 15.09.24), 15.06.27 and 15.09.34 were traded at levels of 7.76% to 7.80%, 8.60% to 8.70%, 9.10% to 9.12%, 9.64% to 9.68%, 9.95% to 9.96%, 10.20% and 10.68% respectively. In the secondary bill market, 28 February 2020 maturity traded at levels of 7.55% to 7.60% as well.

The total secondary market Treasury bond/bill transacted volume for 25 October was Rs. 4.52 billion. 

In money markets, the overnight call money and repo rates averaged 7.43% and 7.47% respectively as the overnight net liquidity surplus in the system increased to Rs. 18.11 billion yesterday.

Rupee loses marginally

In the Forex market, rupee on its spot contracts was seen closing the day at Rs. 181.45/50 yesterday against its previous day’s closing level of Rs. 181.30/45, subsequent to trading at within the range of Rs. 181.40 to Rs. 181.50.

The total USD/LKR traded volume for 25 October was $ 58.40 million.

Some of the forward USD/LKR rates that prevailed in the market were one month - 182.05/20; three months - 183.20/50 and six months - 185.05/35.