Secondary bond market at a complete standstill ahead of weekly bills auction

By Wealth Trust Securities

The secondary bond market was at a complete standstill yesterday, with most market participants opting to be on the sidelines ahead of today’s weekly Treasury bills auction.

 At today’s auction, the total offered amount will be at fifteen week high of Rs. 27 billion consisting of Rs. 5.5 billon of the 91 day maturity, Rs. 10 billion of the 182 day maturity and a further Rs. 11.5 billion of the 364 day maturity. The weighted averages at the last week auction decreased by 14 and three basis points respectively to 8.40% and 8.90% on the 91 day and 182 day maturities, while the yield of the 364 day maturity remained unchanged at 9.46%.

Nevertheless, limited amount of activity was witnessed in the secondary bills market with September and November 2018 maturities changing hands within the range of 9.05% to 9.08% and 9.30% to 9.40% respectively.

The total secondary market Treasury bond/bill transacted volumes for 24 November 2017 was Rs. 4.38 billion.

In money markets, the overnight call money and repo rates remained steady to average 8.13% and 7.53% respectively as the net surplus in the system increased to Rs. 26.38 billion yesterday. The Open Market Operations (OMO) Department of the Central Bank of Sri Lanka drained an amount of Rs. 1.90 billion on an overnight basis by way of a repo auction at a weighted average of 7.25%.

 Rupee appreciates marginally

In Forex markets, the USD/LKR rate on spot contracts were seen appreciating marginally to close the day at Rs. 153.65/70 against its previous day’s closing levels of Rs. 153.70/80 on the back of export conversion.

The total USD/LKR traded volume for 24 November 2017 was $ 13.88 million.

Some of the forward USD/LKR rates that prevailed in the market were one month - 154.45/60; three months - 156.25/35 and six months - 158.85/00.