Bond yields resume decreasing trend ahead of weekly bill auction

Wednesday, 5 December 2018 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The secondary bond market yields were seen resuming their decreasing trend yesterday as yields were seen closing the day lower across the curve in comparison to their previous day’s closings, subsequent to increasing marginally in morning hours of trading.

The liquid maturities of 01.08.26 and 15.06.27 saw their yields dip to intraday lows of 12.07% and 12.15% respectively against their day’s opening highs of 12.20% and 12.24% while 2021 and 2023 maturities dipped to levels of 11.65% and 11.75% respectively against highs of 11.70% and 11.90%. In addition, the 01.08.24 maturity was seen changing hands at levels of 11.95% as well. At today’s Treasury bill auction, the total offered amount of Rs. 19 billion will consist of Rs. 6 billion on the 182 day maturity and Rs. 13 billion on the 364 day maturity. At last week’s auction, the weighted average on the 364 day maturity decreased by one basis point to 11.20% while all bids received on the 182 day bills were rejected. The 91 day bill was not offered.

The total secondary market Treasury bond/bill transacted volumes for 3 December 2018 was Rs. 8.94 billion.

In the money market, the OMO Department of the Central Bank, infused liquidity for durations of overnight to seven days, for amounts of Rs. 22.79 billion and Rs. 10.00 billion at weighted average yields of 8.53% and 8.55% respectively as the overnight net liquidity shortfall increased to Rs. 64.00 billion yesterday. The overnight call money and repo rates averaged 8.96% and 8.93% respectively.

Rupee loses again

The USD/LKR rate on spot contracts was seen depreciating once again yesterday to close the day at Rs. 179.00/20 against its previous day’s closing levels of Rs. 178.60/75 on the back importer dollar demand.

The total USD/LKR traded volume for 3 December 2018 was $ 73.25 million.

Some of the forward USD/LKR rates that prevailed in the market were one month - 180.05/45; three months - 182.00/40 and six months - 185.00/40.