Impressive outcome at historic bond auction; full subscription

• Weekly Treasury bill auction offered amount down to a 78-week low
• Secondary bond market remains active, yields edge up
• Rupee broadly steady

By Wealth Trust Securities

The all-time high volume of Rs 220 billion at the two Treasury bond auctions conducted yesterday received full subscription at its 1st and 2nd phases of the auctions. A further amount of 20% or Rs 17 billion will be on offer only on the 01.07.2028 maturity at its weighted average, through its direct issuance window, until close of business tomorrow. (i.e., 4.00 p.m. on 27.09.23). Given below are the details of the auction,

Today’s weekly Treasury bill auction will have only a total volume of Rs 50 billion on offer, the lowest offered amount since 30th March 2022. This will consist of Rs 20 billion on the 91-day maturity and Rs 15 billion each on the 182 day and 364-day maturities.

Last week’s auction (held on 20.09.23) saw its total offered amount of Rs. 170 billion fully taken up at the 1st phase of the auction. Weighted average yields saw mixed results, as the 91 day dipped by 4 basis points, 182 day increased by 19 basis points and the 364 day dipped by 3 basis points to record averages of 18.12%, 15.38% and 13.32% respectively.

The secondary bond market remained active during the day with yields edging up. The 01.07.25, two 2026’s (i.e 01.06.26 and 01.08.26), 15.07.29 and 15.05.31 changed hands at levels of 15.35% to 15.75%, 15.10% to 15.60%, 14.00% and 13.75% respectively.

In secondary bills, November 2023 maturities changed hands at 17.20%.

The total secondary market Treasury bond/bill transacted volume for 22nd September 2023 was Rs.21.35 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 11.49% and 11.86% respectively while the net liquidity deficit stood at Rs.68.96 billion yesterday.

The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight and 7-day reverse repo auctions for 24.20 billion and 11.00 billion at weighted average rates of 11.37% and 11.33% respectively. An amount of Rs.56.96 billion was withdrawn from Central Banks SLFR (Standard Lending Facility Rate) of 12.00% while an amount of Rs. 23.20 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 11.00%.

Forex Market

In the Forex market, the USD/LKR rate on spot contracts were traded within the range of Rs.324.64 to Rs.324.86 yesterday before closing the day at Rs.324.75/324.90 against its previous week’s closing level of Rs.324.50/325.00.

The total USD/LKR traded volume for 22nd September was US $ 30.50 million.

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