Dull sentiment continues ahead of T-bill auctions

• Liquidity shortfall increases further

By Wealth Trust Securities

The dull sentiment in the secondary bond market continued yesterday as well, with activity at a complete standstill for a second consecutive day. A single trade was witnessed on a seven-month bond maturity of 15.03.22 at 5.908%.

At today’s bill auction, a total volume of Rs. 68.5 billion will be on offer, Rs. 12 billion more than its previous weeks total offered volume. This will consist of Rs. 18 billion on the 91 day maturity, Rs. 23 billion on the 182 day maturity and Rs. 27.5 billion on the 364 day maturity. The stipulated cut off rate on the 364 day maturity was increased by 4 basis points to 5.97% while the maximum yield rates of the 91 day and 182 day maturities will be decided below the level of the 364 day maturity. 

At last week’s auction, the total accepted volume increased to a high of 66.05% of its total offered volume while the weighted average rates increased across the board by 54, 56 and 61 basis points on the 91 day, 182 day and 364 day maturities respectively to 5.87%, 5.90% and 5.93%.

The Colombo Consumer Price Index (CCPI) or inflation for the month of August was seen increasing to 6.00% on the basis of its point to point against its previous month of 5.7% while its annualised average was registered at 4.3%.

The total secondary market Treasury bond/bill transacted volume for 30 August was Rs. 0.1 billion.   

In money markets, the weighted average rates on overnight call money and repo remained mostly unchanged at 5.79% each yesterday as an amount of Rs. 109.65 billion was deposited at Central Banks SLDR of 5.00%. 

Nevertheless, the net liquidity shortage increased further yesterday to Rs. 41.04 billion with an amount of Rs. 150.69 billion been withdrawn from Central Banks SLFR of 6.00%. The Domestic Operations Department (DOD) of the Central Bank of Sri Lanka refrained from conducting any auctions yesterday.

USD/LKR   

In Forex markets, the overall market continued to remain inactive yesterday.

The total USD/LKR traded volume for 30 August was $ 8.00 million.   

(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)