Weekly auction undersubscribed for second consecutive week

• Secondary market yields decrease

By Wealth Trust Securities

The weekly Treasury bill auction was undersubscribed for a second consecutive week as its total accepted amount was seen falling short of its total offered amount once again. An amount of Rs. 19.16 billion was accepted in total from all three maturities against its total offered amount of Rs. 40 billion. The weighted averages were recorded at 4.51%, 4.64% and 4.88% on the 91 day, 182 day and 364 day maturities respectively. The bids to offer ratio decreased to 1.31:1. 

Activity in the secondary bond market increased during the pre-auction trading session as yields decreased yesterday. The liquid maturities of 15.12.22, 15.01.23, 01.09.23, 15.09.24 and 15.08.27 hit intraday lows of  5.57%, 5.58%, 5.85%, 6.08% and 6.90% respectively against its previous day’s closing levels of 5.58/65, 5.63/65, 5.87/90, 6.10/20 and 6.90/00. In addition, maturities of 01.03.21 and 01.08.21 traded at levels of 4.64% and 4.88% as well, while activity moderated towards the latter part of the day. The total secondary market Treasury bond/bill transacted volumes for 22 September was Rs. 7.30 billion.   

In the money market, the weighted average rates of overnight call money and Repos registered at 4.52% and 4.66% respectively as the overnight net liquidity surplus increased to Rs. 164.89 billion yesterday.

LKR appreciates further

In the Forex market, USD/LKR rate on spot contracts was seen appreciating further to close the day at Rs. 184.95/05 against its previous day’s closing level of Rs. 185.35/40 on the back of continued selling interest by Banks.

The total USD/LKR traded volume for 22 September was $ 71.00 million.   

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