Secondary bond market remains active ahead of weekly bill auction

By Wealth Trust Securities

The secondary bond market continued to remain active with yields declining marginally on the back of continued buying interest mainly from local investors. 

The liquid maturity of 15.03.23 saw its yield dip to an intraday low of 10.33% against an opening high of 10.37% while the three 2019’s (15.01.19, 15.09,19, 01.11.19), 01.10.22, 15.10.25, 15.06.27 and 15.03.28 maturities were seen changing hands at levels of 8.80%, 9.50%, 9.58%, 10.25% to 10.34%, 10.50%, and 10.63% respectively. 

Today’s bill auction will have on offer a total amount of Rs. 15 billion consisting of Rs.3 billion each of the 91-day and the 182-day maturities and a further Rs. 9 billion of the 364 day maturity. At last week’s auction, the weighted average on the 364-day bill maturity remained steady at 9.43%, following two consecutive weeks of increases while the weighted average on the 91-day bill increased for a second consecutive week to 8.37% by two basis points. All bids received on the 182-bill were rejected.

The total volume of Treasury bonds/bills transacted in the secondary market on 16 July 2018 was Rs. 3.7 billion.

The OMO (Open Market Operations) Department of the Central Bank of Sri Lanka was seen draining out liquidity by way of a term repo auction and an overnight repo auction yesterday as the net liquidity surplus increased to Rs. 24.88 billion. 

The seven-day term Repo auction drained out an amount of Rs. 10 billion at a weighted average of 8.28% while a further Rs. 12.91 billion was drained out from the overnight auction at a weighted average of 8.01%. Call money and repo rates averaged 8.49% and 8.34% respectively.

Rupee dips marginally

In Forex markets, the spot rate was seen depreciating marginally to close the day at Rs. 159.90/00 yesterday against its previous day’s closing of Rs. 159.85/95.

The total USD/LKR traded volume for 16 July 2018 was $ 52.80 million.

Some of the forward USD/LKR rates that prevailed in the market were one month - 160.75/95; three months - 162.40/60 and six months - 164.80/10.