Yields remain broadly steady ahead of weekly bill auction

By Wealth Trust Securities

Secondary market bond yields remained mostly unchanged yesterday, ahead of today’s weekly bill auction.  Limited activity was witnessed consisting of the two liquid maturities of 15.03.23 and 01.09.28 at levels of 9.96% to 9.97% and 10.25% respectively as well as the two 2018 maturities (i.e. 15.07.18 and 15.08.18) within the range of 8.25% to 8.28%. Furthermore, the 15.01.19 maturity was seen changing hands at levels ranging from 9.30% to 9.35%. 

Today’s bill auction will have on offer a total amount of Rs. 28 billion consisting of Rs. 4 billion of the 91 day, Rs. 6 billion of the 182 day and Rs. 18 billion of the 364 day maturities. At last week’s auction, the weighted average yield of the 364 day bill decreased by 20 basis points to 9.71%.

In the secondary bill market, August and September 2018 bills were seen trading at levels of 8.25% and 8.55% respectively while the April 2019 bills traded at levels of 9.50% to 9.57%.

The total secondary market Treasury bond/bill transacted volumes for 16 April 2018 was Rs. 6.57 billion.

In money markets, the overnight call money and repo rates remained mostly unchanged to average 7.89% and 7.87% respectively as the liquidity in the system stood at a net surplus of 32.19 billion. The Open Market Operations (OMO) Department of the Central Bank Sri Lanka was seen successfully injecting an amount of Rs. 15.00 billion for a period of eight days at a weighted average yield of 8.26% by way of a term reverse repo auction, valued today.

Rupee depreciates further

In Forex markets, importer demand led to the USD/LKR rate on spot contracts depreciating further to close the day at Rs. 156.40/50 against its previous day’s closing levels of Rs. 155.95/10.

The total USD/LKR traded volume for 16 April 2018 was $ 32.50 million.

Some of the forward USD/LKR rates that prevailed in the market were one month - 157.10/25; three months - 158.55/65 and six months - 160.70/80.