Weekly auction subscription dips to 67%; averages increase

• Rs. 30 billion T-bond auctions in focus
• Rupee remains steady

By Wealth Trust Securities

 The total accepted volume at the weekly Treasury bill auction was seen dipping to a low of 67.01% of its total offered amount in comparison to its previous week’s 100% subscription. The 91-day bill maturity continued to see considerable demand as an amount of Rs. 52.14 billion was accepted against its offered amount of Rs. 40 billion and against a total accepted amount of Rs. 60.31 billion. 

The weighted average rates on the 91-day and 182-day maturities increased further by 71 and 192 basis points respectively to 33.05% and 32.53% while the weighted average rate on the 364-day maturity decreased further by 15 basis points to 29.60%.

The phase 2 of the auction will be opened after laps of one week, on the 182-day and 364-day maturities at its weighted average rates until close of business on the day prior to settlement (i.e., 3.30 pm on 13.10.22). 

Meanwhile, the Treasury bond auctions due today will see a total volume of Rs. 30 billion on offer, consisting of Rs. 12.5 billion of a 01.07.2025 maturity and Rs. 17.5 billion of a 15.07.2029 maturity.

The bond auctions conducted on 29 September saw the offered amount of Rs. 70 billion on the 01.07.2032 maturity taken up fully at its first phase while a further amount of Rs. 14 billion was also taken up under its direct Issuance window. 

However, the other two maturities of 01.07.2025 and 15.01.2028 saw only an amount of Rs. 57.31 billion been accepted in total against its total offered amount of Rs. 75 billion. The weighted average rates were recorded at 30.95%, 31.50% and 30.09% on the 01.07.2025, 15.01.2028 and 01.07.2032 maturities respectively.

In the meantime, the secondary bond market was at a complete standstill yesterday while bills maturing in October, November and December 2022 changed hands at levels of 23.00%, 27.25% to 28.10% and 32.50% respectively while January and August 2023 maturities changed hands at levels of 32.60% to 33.12% and 30.25% respectively as well.

The total secondary market Treasury bond/bill transacted volume for 11 October was Rs. 0.75 billion.   

In money markets, the net liquidity deficit stood at Rs. 375.63 billion yesterday as an amount Rs.  704.02 billion was withdrawn from Central Bank’s Standard Deposit Facility Rate (SDFR) of 15.50% against an amount of Rs. 328.39 billion deposited at Central Banks Standard Lending Facility Rate (SLFR) of 14.50%. The weighted average rate on overnight Call money and REPO stood at 15.50%.

Forex market 

In the forex market, the middle rate for USD/LKR spot contracts remained steady at Rs. 362.90.

The total USD/LKR traded volume for 11 October was $ 104.72 million.  

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