Primary bond auctions produce inspiring outcomes

By Wealth Trust Securities

The two Treasury bond auctions conducted yesterday produced rousing outcomes as the total offered amount of Rs. 50 billion was successfully taken up in the first phase of the auction.  

The 15.11.2023 maturity recorded a weighted average rate of 6.36%, equal to its pre-auction rate of 6.33/35, but well below its stipulated cut-off rate of 6.40%. The 01.07.2028 maturity fetched a weighted average rate of 8.04%, below its stipulated cut-off rate of 8.06%. The bids to offer ratio stood at 1.96:1. In the secondary bond market, subsequent to the release of the auction results, yields were seen decreasing marginally with the auction maturity of 15.11.23 hitting a low of 6.31% against its day-opening high of 6.35%. In addition, maturities of 15.12.22 and 15.05.23 traded at levels of 5.68% and 6% respectively. 

At today’s bill auction, Rs. 56 billion will be on offer, consisting of Rs. 15 billion on the 91-day maturity, Rs. 23.5 billion on the 182-day maturity and Rs. 17.5 billion on the 364-day maturity. The stipulated cut-off rate on the 364-day maturity was increased to 5.25% 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 the auction. At last week’s auction, the weighted average rate on the 91-day bill increased by one basis point to 5.19%, while weighted average rates on the 182-day and 364-day maturities remained steady at 5.19% and 5.23% respectively. The total accepted amount at the auction increased for a third consecutive week to 93.63% of its total offered amount.

The total secondary market Treasury bond/bill transacted volume for 12 July was Rs. 450 million.   

In money markets, the weighted average rates on overnight call money and repo averaged 4.98% each as the overnight net liquidity surplus stood at Rs. 88.82 billion. An amount of Rs. 140.06 billion was deposited at Central Banks SLDR of 4.50% against an amount of Rs. 51.24 billion withdrawn from Central Banks SLFR of 5.50%. 

USD/LKR   

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

The total USD/LKR traded volume for 12 July 2021 was $ 113 million.   

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