Monday Sep 30, 2024
Monday Sep 30, 2024
Thursday, 15 August 2024 00:15 - - {{hitsCtrl.values.hits}}
By WealthTrust Securities
The Treasury bill auction conducted yesterday, exhibited mixed results. The weighted average yields on the shorter tenor securities were seen increasing, continuing the upwards momentum from last week’s auction and the broader trend of rising market interest rates (both in the primary and secondary market).
Accordingly, the rate on the 91-day tenor increased by 17 basis points to 9.39% and the 182-day tenor by 12 basis points to 9.68%. In contrast, the 364-day tenor saw its weighted average dip marginally by 03 basis points to 10.03%. Despite these varied outcomes, the auction was fully subscribed and considered a positive outcome when compared against the rest of the yield curve, while the entire Rs. 130.00 billion on offer was raised at its 1st phase. The total bids received exceeded the offered amount by 1.87 times.
Strong demand continued to be observed on the short tenors, with 84% of the total accepted amount attributable to the 91- and 182-day tenors. In particular, maturity-wise the 91- and 182-day raised more than their respective offered amounts, while the take up on the 364-day maturity was below the offered amount.
The 2nd phase of the auction will be opened on 91-day and 364-day maturities at its weighted average rates until close of business of the day prior to settlement (i.e., 4.00 pm on 15.08.2024).
The secondary Treasury bill market saw significant activity. November maturities (approximately 3 months) were observed transacting on large volumes at the rate of 9.35% during morning hours of trading. Similarly, February 2025 (approximately six months) maturities were seen trading within the range of 9.78%-9.80% ahead of the auction, while May 2025 maturities (close to one year) were seen changing hands within the range of 10.00-10.10%.
Meanwhile, in the secondary bond market, the bearish to negative sentiment saw yields continue to rise on the back of continued selling pressure, particularly on the shorter tenors on the back of high volumes.
Accordingly, the 01.06.26 and 01.08.26 maturities were seen trading at the elevated levels of 11.05% and 11.10% respectively. Similarly, the yield on the 15.12.27 maturity was observed trading at 12.25%. The 15.12.28 followed this trend, with trades observed at the rate of 13.00%. Additionally, the medium tenor 15.05.30 maturity was seen trading within the range of 13.21% to 13.25%.
The total secondary market Treasury bond/bill transacted volume for 13 August was Rs. 6.28 billion.
In money markets, the weighted average rates on overnight call money and were 8.55% and 8.82%, respectively.
The net liquidity surplus stood at Rs. 107.13 billion yesterday as an amount of Rs. 108.18 billion was deposited at Central Bank’s SDFR (Standing Deposit Facility Rate) of 8.25% as against an amount of Rs. 1.05 billion been withdrawn from the Central Bank’s SLFR (Standing Lending Facility Rate) of 9.25%. The DOD (Domestic Operations Department) of Central Bank refrained from injecting liquidity by way of reverse repo auctions.
Forex Market
In the Forex market, the USD/LKR on spot contracts closed the day stable at Rs. 299.15/299.25 against its previous day’s closing level of Rs. 299.10/299.25.
The total USD/LKR traded volume for 13 August was $ 63.23 million.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)
