T. Bill averages increase; auction undersubscribed

• Rs. 100 b T-Bond auctions in focus
• Rupee dips marginally

By Wealth Trust Securities 

The Treasury bill auction conducted yesterday saw its weighted averages increase week on week, following 6 consecutive weeks of declines.

The 91-day Treasury bill which represented 52.21% of the total accepted amount saw its weighted average rate increasing by 129 basis points or 1.29% to 19.08 while the weighted average rate on the 182-day bill increased by 102 basis points to 16.95%. The 364-day bill increased by 18 basis points to 14.04%.

All the maturities fell short of its offered amounts as only an amount of Rs. 99.66 billion in total was accepted against a total offered amount of Rs. 160 billion. 

The 2nd phase of the auction was opened for all three maturities at its weighted average rates until 4.00 pm, today (i.e., 13.07.23). Given below are the details of the auction, 

Today’s Treasury bond auctions, conducted in lieu of a Treasury bond maturity of Rs. 128.42 billion due on the 15 July will see a volume of Rs. 100 billion on offer, consisting of Rs. 50 billion each on a 01.05.2028 maturity and a 15.05.2030 maturity, carrying coupon rates of 9.00% and 11.00% respectively. 

At the last bond auctions conducted on 13 March 2023, the 01.05.2027 maturity was issued at a weighted average rate of 28.11% while it drew Rs. 118.95 billion in successful bids at its 1st and 2nd Phases of the auction against its initial total offered amount of Rs.110 billion. However, only an amount of Rs. 441 million accepted on the 15 November 2024 maturity at a weighted average rate of 29.99% against its offered amount of Rs. 70 billion. 

In the secondary bond market, the 2027’s (i.e., 01.05.27 & 15.09.27) traded at levels of 14.45% to 15.00% while in the secondary bill market, September, November, December 2023 and May-June 2024 maturities changed hands at levels of 20.00% to 21.00%, 18.75%, 16.00% to 17.25%, 16.00% to 16.25% and 14.30% to 14.50% respectively. 

The total secondary market Treasury bond/bill transacted volume for 11 July 2023 was Rs. 10.53 billion. 

In money markets, the DOD (Domestic Operations Department) of Central Bank injected liquidity by way of overnight and 7-day reverse repo auctions for a total volume of Rs. 88.1 billion at weighted average rates of 11.60% and 12.00% respectively while an amount of Rs. 88.4 billion was withdrawn from Central Banks SLFR (Standard Lending Facility Rate) of 12.00%. The net liquidity deficit stood at Rs. 175.54 billion yesterday. 

The weighted average rates on overnight call money and repo were registered at 11.95% and 11.77% respectively. 

Forex Market 

In the Forex market, the USD/LKR rate on spot contracts were seen closing the day marginally lower at Rs. 315.50/316.50 against its previous day’s closing level of Rs. 314.00/314.75.

The total USD/LKR traded volume for 11 July was $ 75.85 million. 

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