Weekly weighted averages remain steady

By Wealth Trust Securities

The first Treasury bill auction conducted yesterday for the year 2020 saw weighted averages remain steady on the 182 day and 364 day bills while all bids received on the 91 day bill were rejected for the first time in 15 weeks. 

The 364 day recorded a weighted average of 8.45% for a second consecutive week while the 182 day remained steady at 8.02%. Demand for the market favourite 364 day bill saw its accepted amount hit Rs. 21.85 billion against its offered amount of Rs. 14 billion which led to the total offered amount of Rs. 25 billion been accepted along with the 182 day bill. The bid to offer ratio decreased to 2.46:1.  

The secondary bond market yields dipped further in early hours of trading on the back of continued buying interest leading to the Treasury bill auction. The liquid 2023 maturities (i.e. 15.07.23 and 15.12.23) saw its yield dip to an intraday lows of 9.18% and 9.30% respectively against the previous day’s closing level of 9.20/30 and 9.30/40 while the two 2024 (i.e. 15.06.24 and 15.09.24) maturities were seen changing hands at lows of 9.47% each against its previous day’s closing levels of 9.48/52 and 9.50/54. In addition, maturities of 15.05.23, 01.09.23, 01.01.24 and 01.06.26 changed hands at levels of 9.25% each, 9.40% to 9.45% and 9.80% respectively. However, selling interest subsequent to auction results saw yields close the day marginally higher once again.   

The total secondary market Treasury bond/Bill transacted volume for 31 December 2019 was Rs. 8.95 billion.

In money markets, overnight call money and repo rates averaged at 7.50% and 7.53% respectively as the Open Market Operations (OMO) Department of the Central Bank of Sri Lanka was seen infusing an amount of Rs. 10.00 billion at a weighted average of 7.50%, by way of an overnight reverse repo auction.

It also injected an amount Rs. 20.00 billion for 14 days at a weighted average rate of 7.52%, valued today. The overnight net liquidity surplus in the system stood at Rs. 36.69 billion yesterday.

Rupee appreciates further

The rupee on spot contracts gained to an intraday high of Rs. 180.75 during the morning hours of trading on the back of continued selling interest by banks before losing most of its gain to close at levels of Rs. 181.15/25 against the previous day’s closing levels of Rs. 181.30/45.

The total USD/LKR traded volume for 31 December 2019 was $ 105.75 million.

Some of the forward USD/LKR rates that prevailed in the market were one month – 181.60/75; three months – 182.55/75 and six months – 184.05/35.

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

broking companies)