Upward trend in yields continue at weekly bill auction

By Wealth Trust Securities

At the weekly Treasury bill auction held yesterday, the upward trend in weighted average yields continued for a fourth consecutive week. 

The 364 day maturity increased the most by five basis points to 9.46%, closely followed by the 182 day and 91 day maturities increasing by two and one basis points respectively to 9.12% and 8.79%. Only an amount of Rs. 14.74 billion was accepted in total at the auction against its total offered amount of Rs. 20 billion as the bids to offer ratio dipped to 2.01:1.  Meanwhile, the secondary bond market became somewhat active, with maturities of 01.05.20, 01.05.21 and 15.03.25 changing hands between lows of 9.80%, 10.03%, 10.25% and highs of 9.95%, 10.08% and 10.28% respectively. Furthermore, on the long end of the yield curve, the 15.05.30 maturity was seen changing hands within the range of 10.62% to 10.64% while on the short end of the curve the 2018 and 2019 maturities traded within the range of 9.40% to 9.45% and 9.70% to 9.80% respectively. In the secondary bill market, considerable volumes of the March 2018 maturities were seen changing hands at level of 9.00% to 9.05%.

 The total secondary market Treasury bond/bill transacted volumes for 16 October 2017 was Rs. 7.42 billion. In money markets, the overnight call money and repo rates remained mostly unchanged to average 8.15% and 7.92% with no Open Market Operations (OMO) being conducted. The net surplus liquidity in the system decreased to a two and half month low of Rs. 6.93 billion.

Rupee dips again

 The USD/LKR rate on spot contracts dipped marginally to close the day at levels of Rs. 153.60/65 against its previous day’s closing level of Rs. 153.50/55, backed by importer demand.  The total USD/LKR traded volume for 16 October was $ 50.37 million. 

 Some of the forward USD/LKR rates that prevailed in the market were one month - 154.45/55; three months - 156.25/35 and six months - 158.50/60.