Accepted volume exceeds offered volume for first time in 5 weeks at weekly auction

By Wealth Trust Securities 

The weekly Treasury bill auction conducted yesterday attracted over Rs.23.3 billion in successful bids against its initial total offered amount of Rs.22 billion, the first such occurrence in five weeks where the total accepted volume exceeded the total offered volume. 

The 91 day bill dominated the auction as it represented 39% of the total accepted amount with its weighted average increasing by two basis points to 8.88% while the 182 day bill increased by three basis points to 9.86%. Reversing an upward trend over the previous eight weeks, the 364 day bill weighted average remained steady at 10.55% week on week.

The yields in the secondary bond market edged up marginally yesterday, mainly on the 01.01.24 and 15.03.25 maturities to intraday highs of 12.50% and 12.55% respectively against its days opening lows of 12.45% and 12.50%. However, buying interest on the 2018 and 2019 maturities saw it change hands within the range of 11.18% to 11.22% and 11.50% to 11.60% respectively while the 15.12.20 changed hands within the range of 11.80% to 11.85%.

This was ahead of today’s Treasury bond auctions, at where a total amount of Rs.34 billion will be on offer consisting of Rs.12 billion each on a 2.10 year maturity of 01.05.2019 and a 4.08 year maturity of 01.03.2021 and a further amount of Rs.10 billion on a 9.01 year maturity of 01.08.2025.

Meanwhile in money markets yesterday, Central Bank was seen discontinuing its reverse repo auctions on an overnight basis for the first time during the month of June as market liquidity turned positive for the first time since 9 June. Market recorded a net surplus of Rs.8.99 billion as overnight call money and repo rates remained mostly unchanged to average 8.19% and 8.05% respectively. 

Rupee appreciates considerably 

The USD/LKR rate on the active one week forward contract was seen appreciating considerably yesterday to close the day at Rs.146.30/60 against its previous day’s closing of Rs.147.95/10 on the back of export conversion and foreign buying in Rupee bonds. The total USD/LKR traded volume for 28 June was $ 48.30 million. 

Some of the forward USD/LKR rates that prevailed in the market were: one month – 146.95/05; three months – 148.30/50; and six months – 150.60/80.