Accepted amount exceeds offered value for 7th consecutive week at weekly auction

Thursday, 13 March 2014 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities The prevailing demand for short tenure durations reflected favourably at this week’s Treasury bill auction as well with the total accepted amount exceeding the total offered amount for a seventh consecutive week. Once again the market favourite 364 day maturity dominated the auction as it represented 73% of the total accepted amount of Rs. 18.2 billion

while its weighted average (WAvg) dipped by one basis point (bp) to 7.06%. Meanwhile, the WAvgs on the 91 day and 182 day maturities dipped by two bp and three bp respectively to 6.69% and 6.85% as well. Secondary market bond yields rebound once again Reversing a downward trend over the past few days, secondary market bond yields were seen closing the day higher in comparison to its previous day’s closing levels on the back of selling interest across the board. Activity continued to surround the liquid two 2018 maturities (i.e. 1 April 2018 and 15 August 2018) as it was seen hitting intraday highs of 8.85% and 8.95% against its morning lows of 8.80% and 8.90%. In addition, the five year maturity of 1 July 2019 was seen edging up to levels of 9.10% as well against its days opening low of 9% while a limited amount on the seven year maturity of 1 May 2021 was seen changing hands at levels of 9.95%. In secondary bill markets, the pass through demand saw September 2014 bills changing hands within the range of 6.76% to 6.78%, October within 6.80% to 6.85%, November within 6.85% to 6.95% and the latest 364 day bill within the range of 7.02% to 7.05% subsequent to the release of auction results. Meanwhile in money markets, overnight call money and repo rates remained steady to average 6.89% and 6.32% respectively as Central Bank continued to refrain from conducting any auctions under its Open Market Operations (OMO) for a second consecutive day. The total surplus of Rs. 3.35 billion was deposited at CBSL’s Standing Deposit Facility Rate (SDFR) of 6.50%. Rupee dips marginally In Forex markets, the rupee dipped marginally to close the day at Rs. 130.60/65 against its previous day’s closing of Rs. 130.55/57 on the back of importer demand. The total USD/LKR traded volume for the previous day (11 March 2014) stood at US$ 76.01 million. Some of the forward dollar rates that prevailed in the market were: one month – 131.19; three months – 132.16; and six months – 133.61.