Bearish sentiment persists ahead of Treasury bond auctions
Tuesday, 10 March 2015 01:14
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By Wealth Trust Securities
The bearish sentiments in secondary bond markets persisted yesterday as most market participants were seen adopting a wait and see policy ahead of the Treasury bond auctions due today.
A very limited amount of activity was witnessed on the two-year maturity of 15.05.2017 within the range of 7.50% to 7.55% and the six-year maturity of 01.05.2021 within the range of 8.20% to 8.32%. Today’s bond auction conducted in line with a bond maturity of Rs. 79.3 billion due on the 15 March will see a total amount of Rs. 30 billion on offer consisting of Rs. 10 billion each on a 7.04 year, 10-year and 20-year durations.
In secondary bill markets, buying interest saw May 2015 maturities changing hands within the range of 6.35% to 6.45% while the 364-day bill was quoted at levels of 6.80/95.
Meanwhile, in money markets yesterday, overnight call money and repo rates decreased further to average 6.70% and 5.99% respectively as surplus liquidity stood at Rs. 72.83 billion. The Open Market Operations (OMO) department of Central Bank was seen conducting outright auctions yesterday for durations of three days, 10 days, 31 days and 52 days at where only an amount of Rs 2.30 billion was drained from the system at weighted averages of 6.35% and 6.52% respectively for three days and 10 days while all bids on the other two maturities were rejected.
Rupee remains steady
The USD/LKR rate on one week forward contracts as well as spot and spot next contracts remained steady at levels of Rs. 133.50/60, Rs. 132.90/20 and Rs. 132.92/20 respectively. The total USD/LKR traded volume for 6 March 2015 was at $ 54.50 million.
Some of the forward USD/LKR rates that prevailed in the market were 1 month - 134.25; 3 months - 135.25 and 6 months - 136.95.
