Weekly bill auction offer amount drops to 2-year and 9-month low

• Secondary market bond yields increase marginally in moderate trading

 By Wealth Trust Securities

The weekly Treasury bill auction conducted today will see a two-year and nine-month low volume of Rs.8 billion on offer, consisting of Rs. 3 billion on the 91-day maturity and Rs. 5 billion on the 364-day maturity. 

All bids received for the 91-day and 364-day maturities at last week’s auction were rejected for the first time in close to one and a half years (79 weeks) due to most market participants demanding for higher yields. In the secondary bill market yesterday, May 2019 bills were traded at levels of 9.00% to 9.05%.

Meanwhile, activity in the secondary bond market moderated yesterday, with yields edging up marginally. The liquid maturities of 15.10.21, two 2023s (i.e. 15.03.23 and 15.07.23) and 01.08.24 saw its yields increase to intraday highs 10.47%, 10.63%, 10.65% and 10.75% respectively against its previous day’s closing levels of 10.45/52, 10.55/62, 10.60/63 and 10.65/75. 

In addition, the maturities of 15.11.18, three 2021s (i.e. 01.05.21, 01.08.21 and 15.12.21) and 15.03.28 were traded at levels of 8.85% to 9.05%, 10.41% to 10.60% and 10.80% to 10.85% respectively as well.

The total secondary market Treasury bond/bill transacted volumes for 21 September 2018 was Rs. 6.33 billion. 

In money markets, the Open Market Operations (OMO) Department of the Central Bank of Sri Lanka injected an amount of Rs.29.16 billion and Rs.30.00 billion on an overnight basis and seven days at weighted averages of 8.10% and 8.17% respectively as the net market liquidity shortfall increased to Rs.74.08 billion yesterday. The overnight call money and repo rates increased to average 8.09% and 8.08% respectively.

Rupee loses

The rupee on its spot contracts were seen depreciating yesterday to close the day at Rs.168.85/05 against its previous day’s closing levels of Rs.168.30/80 on the back of continued importer demand.

The total USD/LKR traded volume for 21 September 2018 was $ 50.95 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 Month - 169.90/20; 3 Months -  171.60/90 and 6 Months - 174.20/60.