Secondary bond market yields decrease ahead of weekly bill auction

By Wealth Trust Securities 

The secondary bond market witnessed increased activity yesterday, as yields were seen decreasing during the morning hours of trading mainly consisting of the 15.12.21 and 01.08.26 maturities, to daily lows of 11.72% and 12.00%. However, renewed selling interest at these levels curtailed the downward momentum, with yields easing off marginally to settle at 11.77% and 12.02% respectively. In addition, the 01.03.21, 15.05.23, 15.10.25 and 01.06.26 maturities were seen changing hands at levels of 11.55%, 11.85% to 11.95%, 11.88% to 11.90% and 12.05% to 12.10%. Furthermore, significant volumes of the 22 March 2019 and 12 April bills were seen trading at levels of 10.05% and 10.13%. 

At today’s bill auction, a total amount of Rs. 18 billion will be on offer consisting of Rs. 8.0 Billion on the 182 day maturity and Rs. 10.0 billion on the 364 day maturity. At last week’s auction, the weighted average yields of both the 182 day and 364 day bills increased by 02 and 04 basis points to 10.03% and 11.24% respectively.

The total secondary market Treasury bond transacted volume for 17 December was Rs. 9.47 billion.

In money markets, the net liquidity shortfall in the system decreased to Rs. 82.14 billion yesterday with the OMO Department of the Central Bank infusing liquidity by way of an overnight and a seven day term reverse repo auction for successful amounts of Rs. 18.00 billion and 15 billion respectively at weighted average yields of 8.86% and 8.89%. The overnight call money rate averaged 9.00%.

Rupee loses marginally   

The USD/LKR rate on spot contracts depreciated marginally to close the day at levels of Rs. 180.10/30 against its previous day’s closing levels of Rs. 179.90/10 on the back of buying interest by banks.

The total USD/LKR traded volume for 17 December was $ 139.57 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 month - 181.10/50; 3 months - 183.10/50 and 6 months - 186.10/50.