Weekly averages continue to increase; auction undersubscribed

• Bond yields dip ahead of final round of T-bond auctions

The weekly Treasury bill weighted averages were seen increasing while the total accepted amount was seen falling short of the total offered amount for a third consecutive week at its auctions held yesterday. 

The market favourite 91-day bill maturity increased above the 8% psychological level once again. The increases were recorded at 45, 23 and 22 basis points on the 91-day, 182-day and 364-day bills respectively to 8.16%, 8.33% and 8.24%. Only Rs. 33.57 billion was accepted against a total offered amount of Rs. 48.5 billion while the bids-to-offer ratio was registered at 1.73:1. 

Given below are the details of the auction:

In the secondary bond market, yields were seen decreasing further during the morning trading session. The liquid maturities of 01.05.25, 15.10.27 and 15.05.30 hit lows of 11%, 11.4% and 11.83% respectively against its previous day’s closing levels of 11.00/10, 11.45/52 and 11.90/95. In addition, 01.09.28 maturity traded at levels of 11.54% to 11.55%, while activity moderated towards the latter part of the day.

In secondary bills, 25 March 2022 maturity traded at a level of 7.95%.

Today’s T-bond auctions, the last for the year 2021 will see in total an amount of Rs. 100 billion on offer in lieu of a Rs. 97.93 billion maturity due on the 1 January 2022. This will consist of Rs. 25 billion each of 01.08.2025 and 15.06.2027 maturities and a further Rs. 50 billion of 15.01.2033. The weighted average yields at the bond auctions conducted on 13 December for the maturities of 01.05.25, 15.10.27, 01.01.29 and 15.03.31 were recorded at 9.70%, 10.90%, 11.27% and 11.61% respectively, while the offered amounts on all four maturities were successfully taken up at its first phase of the auction. An amount of Rs. 0.95 billion was successfully issued under the Direct Issuance window on the 15.03.2031 maturity as well.

The total secondary market Treasury bond/bill transacted volumes for 28 December was Rs. 2.57 billion.  

In money markets, the net liquidity deficit decreased marginally to Rs. 352.46 billion yesterday as an amount of Rs. 102.85 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 5% against an amount of Rs. 455.31 billion withdrawn from Central Banks SLFR (Standard Lending Facility Rate) of 6%. The weighted average rates on overnight call money and repo remained mostly unchanged at 5.94% and 6% respectively.

USD/LKR  

In the forex market, the USD/LKR rate on spot contracts traded at Rs. 203, while the overall market remained inactive yesterday.

The total USD/LKR traded volume for 28 December was $ 32.03 million.  

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