Yields pick up marginally in dull activity ahead of weekly bill auction

• Secondary market transacted volume dips to a 32-day trading low

By Wealth Trust Securities

Activity in the secondary bond market continued to remain dull yesterday with yields picking up marginally ahead of today’s weekly Treasury bills auction. 

Limited amount of trades were witnessed on the maturities of 15.11.18, 15.09.19, 15.12.21, 01.08.25 and 01.08.26 at highs of 9.55%, 9.75%, 10.10% and 10.35% each respectively.

This ahead of today’s weekly Treasury bill auction where a total an amount of Rs.20 billion will be on offer, consisting of Rs.5 billion on the 91 day maturity, Rs.6 billion on the 182 day maturity and Rs.9 billion on the 364 day maturity.  

At last week’s auction, the weighted averages increased across the board to 8.79%, 9.12% and 9.46% respectively. 

The total secondary market Treasury bond/bill transacted volumes for 23 October dipped to a 32-day trading low of Rs.0.65 billion. In money markets, the overnight call money and repo rates averaged 8.14% and 7.71% respectively as the net surplus liquidity in the system increased to Rs.19.72 billion yesterday. The OMO department of Sri Lanka drained out an amount of Rs. 12 billion on an overnight basis by way of a repo auction at a weighted average of 7.25%. 

Rupee dips further 

 The USD/LKR rate on its spot contracts were seen dipping further yesterday to close the day at Rs.153.80/90 yesterday against its previous day’s closing of Rs.153.70/80 on the back of continued importer demand. 

The total USD/LKR traded volume for 23 October was $ 42.80 million. 

Given are some forward USD/LKR rates that prevailed in the market: one month – 154.60/70; three months – 156.40/50; six months – 158.85/95.