Weekly bill auction subscription increases to 95%

• Bond yields ease marginally ahead of monetary policy announcement

By Wealth Trust Securities

The total accepted amount at yesterday’s bill auction was seen increasing to a five week high of 95.26% of its total offered amount while been undersubscribed for a fifth consecutive week. A total amount of Rs. 37.44 billion was accepted against its total offered amount of Rs. 39.3 billion as the bids-to-offer ratio increased to a five week high of 1.67:1 as well. The weighted average rates on the 182-day and 364-day maturities were recorded at its stipulated cut off rates of 4.76% and 5% respectively, while the weighted average rate of the 91-day maturity was registered at 4.64% against its stipulated cut off rate of 4.65%. 

In the secondary bond market, yields declined marginally yesterday with the liquid maturities of 15.12.22, 15.01.23, 15.09.24 and 15.08.27 hitting intraday lows of 5.76%, 5.85%, 6.45% and 7.15% respectively against its previous day’s closing level of 5.85/90, 5.95/00, 6.48/50 and 7.15/23, driven by renewed buying interest. Activity was also witnessed on the maturities of 15.12.20, 01.09.23 and 15.12.23 at levels of 4.56%, 6.045% to 6.05% and 6.03% to 6.05% respectively. In the secondary bill market, July, October and November 2021 maturities traded at levels of 4.85%, 4.95% and 5% respectively.

This was ahead of today’s monetary policy announcement due at 7.30 a.m. The Central Bank of Sri Lanka kept policy rates unchanged in its previous announcement on 22 October.

The total secondary market Treasury bond/bill transacted volumes for 24 November was Rs. 8.05 billion.   

In the money market, the weighted average rates on overnight call money and repo remained mostly unchanged at 4.55% and 4.56% respectively as the overnight surplus liquidity registered Rs. 185.36 billion yesterday.

Rupee appreciates marginally

In the Forex market, the USD/LKR rate on spot next contracts was seen appreciating marginally yesterday to close the day at Rs. 185.65/90 against its previous days of Rs. 185.80/95 on the back of selling interest by banks.

The total USD/LKR traded volume for 24 November was $ 39.04 million.   

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