Sunday Oct 27, 2024
FT
Sunday Oct 27, 2024
Wednesday, 16 October 2024 00:10 - - {{hitsCtrl.values.hits}}
By Wealth Trust Securities
At the weekly Treasury bill auction conducted yesterday, yields were seen declining for the fourth consecutive week, mirroring the downward trajectory in the secondary market. The weighted average rates across all 3 tenors fell below 10.00%, dropping to levels last seen in late-July this year. Accordingly, the weighted average rate for the 91-day tenor dropped by 37 basis points to 9.32%, while the 182-day tenor decreased by 30 basis points to 9.65%. The 364-day tenor also saw a relatively marginal decline of 5 basis points, bringing the rate to 9.95%. Total bids received exceeded the offered amount by 2.62 times, and the entire Rs. 97.00 billion on offer was successfully raised at its 1st phase.
This coincided with the news that the Sri Lankan authorities were expected to finalise the debt restructuring deal with the nation’s bondholders during discussions at the International Monetary Fund’s annual meetings in Washington, with a target completion expected by the end of this month.
The 2nd phase of the auction will be opened across all 3 tenors at the weighted average rates until close of business of the day prior to settlement (i.e., 4.00 p.m. on 16.10.2024).
Despite this bullish outcome, the secondary bond market yesterday saw yields edge up marginally. The market remained active with healthy volumes transacted.
Accordingly, the 15.12.27 maturity was seen trading within the range of 11.25%-11.30%. The popular liquid 15.02.28 and 15.03.28 maturities saw yields hit intraday highs of 11.60% from lows of 11.50%. The relatively longer 2028 tenor 01.05.28, 01.07.28 and 15.12.28 maturities were seen trading at the elevated levels of 11.65%, 11.63%-11.68% and 11.75% respectively. Additionally, trades were observed on the medium tenor 01.10.32 maturity at the rate of 12.30%.
Meanwhile, in secondary market bills trades were observed on April 2025 maturities at the rates of 9.62% to 9.55% respectively as a precursor to the bill auction.
The total secondary market Treasury bond/bill transacted volume for 14 October was Rs. 21.97 billion.
In money markets, the weighted average rates on overnight call money and Repo stood at 8.51% and 8.70% respectively.
The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of overnight and 7-day term reverse repo auctions for Rs. 34.87 billion and Rs. 61.00 billion at the weighted average rates of 8.48% and 8.61% respectively.
The net liquidity surplus stood at Rs. 63.77 billion yesterday. An amount of Rs. 5.31 billion was withdrawn from the Central Banks SLFR (Standing Lending Facility Rate) of 9.25% as against an amount of Rs. 155.08 billion deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 8.25%.
Forex Market
In the Forex market, the USD/LKR rate on spot contracts closed the day marginally higher at Rs. 293.30/293.60 against its previous day’s closing level of Rs. 293.75/294.00.
The total USD/LKR traded volume for 14 October was $ 52.50 million.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)
