Secondary market bond yields decrease marginally ahead of weekly bill auction

By Wealth Trust Securities

Secondary bond market yields were seen decreasing marginally yesterday on the back of foreign buying interest ahead of today’s weekly Treasury bill auction.

The maturities of 01.10.22, 01.01.24 and 01.08.26 were seen hitting intraday lows of 10.16%, 10.27% and 10.32% respectively against its previous day’s closing levels of 10.20/30, 10.35/45 and 10.41/45. Furthermore, activity was also witnessed on the two 2019 maturities (i.e. 01.07.19 and 15.09.19) at yields ranging from 9.60% to 9.70%.

Today’s bill auction will have on offer a total amount of Rs. 20.5 billion consisting of Rs. 2.5 billion on the 91 day, Rs. 7 billion on the 182 day and Rs. 11 billion on the 364 day maturities. At last week’s auction, the weighted average yields of the 182 and 364 day maturities increased to 9.08% and 9.32% respectively while the 91 day maturity was not on offer.

The total secondary market Treasury bond/bill transacted volumes for 6 October was Rs. 1.54 billion. 

In money markets, the OMO Department of the Central Bank of Sri Lanka was seen draining out an amount of Rs. 5.2 billion on an overnight basis by way of a repo auction at a weighted average of 7.25% as the net surplus liquidity in the system stood at Rs. 12.69 billion yesterday. The overnight call money and repo rates averaged 8.15% and 7.92% respectively.

 Rupee dips

In the Forex market, the USD/LKR spot rate was seen depreciating yesterday to close the day at Rs. 153.40/50 against its previous day’s closing level of Rs. 153.30/40 on the back of importer dollar demand.

The total USD/LKR traded volume for the 7 October 2017 was $ 23.00 million.

Some forward USD/LKR rates that prevailed in the market were 1 Month -  154.20/30; 3 Months - 155.90/00 and 6 Months - 158.10/20.