Weekly weighted averages trickle down

• Bonds rally for second consecutive day ahead of T-Bond auctions

By Wealth Trust Securities

The weekly Treasury bill auctions conducted yesterday saw its weighted averages dip marginally across the board with the 364 day bill decreasing once again for the first time in three weeks. The dips were recorded at 01, 02 and 01 basis point on the 91 day, 182 day and 364 day maturities respectively to 6.67%, 6.78% and 6.92%. A total amount of Rs. 21.2 billion was accepted against its total offered amount of Rs. 23 billion as the bids to offer ratio stood at 1.68:1. 

In the secondary bond market, yields continued to dip for a second consecutive trading day on the back of an active market.

The yields on the two shorter tenure maturities of 15.12.22 & 15.01.23 dipped to intraday lows of 7.74% and 7.75% respectively against its previous day’s closing levels of 7.75/78 and 7.78/82, while yields on the 2024 maturities (i.e. 01.01.24, 15.06.24 & 15.09.24) decreased to 8.13% and 8.32% each respectively as against 8.25/30, 8.32/37 and 8.35/38. In addition, maturities of 01.05.25 and 15.10.27 changed hands at lows of 8.45% and 8.82% respectively while the 15.12.23, 01.08.25 and 01.06.26 maturities traded at levels of 7.92% to 8.00%, 8.55% and 8.65% respectively as well.

In the secondary bill market, June 2020, August 2020, September and December 2020 maturities changed hands at 6.55%, 6.67%, 6.70% and 6.78% respectively, pre-auction.

Today’s Treasury bond auctions will see an total amount of Rs. 35 billion on offer, consisting of Rs. 20 billion on a 2 year and 6 months maturity of 15.12.2022 and Rs. 15 billion on a 5 year and 08 months maturity of 01.02.2026. The weighted average yields at the auctions conducted on 8 June for the maturities of 15.12.2022 and 01.05.2025 were recorded at 7.90% and 8.59% respectively.

In money markets, the weighted average rates of overnight call money and repo stood at 5.80% and 5.89% respectively as the overnight net liquidity surplus in the system stood at Rs. 105.07 billion yesterday. The DOD (Domestic Operations Department) of the Central Bank refrained from conducting any auctions for a fourth consecutive day.

Rupee dips 

In the Forex market, the USD/LKR rate on spot contracts depreciated further yesterday to close the day at Rs. 185.20/30 against its previous day’s levels of Rs. 185.05/20, subsequent to trading at levels of Rs. 185.08 to Rs. 185.25.

The total USD/LKR traded volume for 9 June was $ 88.38 million. 

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