Activity continues to remain subdued ahead of weekly bill auction
Wednesday, 11 February 2015 00:00
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By Wealth Trust Securities
Activity in secondary bond markets continued to remain subdued yesterday as well, with a limited amount of movement witnessed on the six year maturity of 1 May 2021 and the seven year maturity of 1 July 2022 as its yields were seen increasing to intraday highs of 7.70% each on very thin volumes in addition to the four year maturity of 1 July 2019 changing hands at levels of 7.18%.
However, two-way quotes on the rest of the yield curve remained broadly steady in comparison to its previous trading day’s closing levels. Furthermore, selling interest on secondary market bills saw April, May, June and July 2015 bills being offered at levels of 5.80%, 5.85%, 5.97% and 6.00% respectively.
Today’s weekly primary auction will have on offer a total amount of Rs. 12 billion, consisting of Rs. 2 billion on the 91 day, Rs. 3 billion on the 182 day and a further Rs. 7 billion on the 364 day maturities. At last week’s auction, the weighted average (WAvg) on the 91 day bill increased by two basis points to 5.82% while WAvg’s on the 182 day and 364 day bills remained steady at 5.90% and 6.05% respectively.
In money markets yesterday, the Open Market Operations (OMO) department of the Central Bank refrained from conducting any auctions for a second consecutive day as overnight surplus liquidity dropped to Rs 9.36 billion. The weighted average on overnight call money and repo rates increased further to 6.50% and 6.31% respectively.
Rupee holds steady
The USD/LKR rate on spot contracts closed the day steady at Rs. 132.80-Rs.133.00 yesterday while spot next, spot next-next and one week forward contracts remained steady as well at levels of Rs. 132.82/02, Rs. 132.84/04 and Rs. 132.94/04 respectively as markets remained inactive. The total USD/LKR traded volume for 9 February 2015 was at US $ 38.80 million.
Some of the forward USD/LKR rates that prevailed in the market were 1 month-133.55; Three months - 134.60 and six months -136.00.
