Bill & Bond sentiment turns bearish towards later part of the week

Monday, 29 December 2014 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities A decrease in yields fuelled by buying interest which was witnessed in the market during the early part of the week, mainly surrounding the three liquid bond series, reversed closer to the week-end, with significant selling pressure due to an increase in the Treasury bill primary auction yields for the second consecutive week and profit taking.

Maturities consisting of the 01.07.2019, 01.07.2022 and 01.01.2024 traded at lows of 7.10%, 7.70% and 7.75%, in comparison to the previous weeks closing yields of 7.25/30,7.96/03, 8.00/15, and went on to close the week at 7.20/30, 7.80/85 and 7.85/95 respectively. Furthermore, the 01.04.2018 and 15.08.2018, and seven year maturity of 01.05.2021 were seen changing hands within the range of 7.00% t

o 7.10%, 7.12% to 7.20% and 7.50% to 7.65% respectively. In the meantime, yields in the secondary bill market consisting of the May 2015 and November 2015 maturities continued to trade at levels of 5.77% to 5.85% and 5.95% to 6.00%. In money markets, Overnight call money and repo rates remained steady to average 6.01% and 5.52% for the week, the average surplus liquidity in the system standing at Rs. 29.49 billion. The Open Market Operations (OMO) Department of the Central Bank was seen mopping up liquidity during the week by way of one to seven day term repo auctions at weighted averages ranging from 5.91% to 6.01%. Rupee continued to trade within a narrow span The rupee on spot next contracts was seen trading within the range of Rs. 131.99 to Rs. 131.9975 during the week while spot next-next contracts was seen closing the week mostly unchanged at levels of Rs. 131.99/05. The daily USD/LKR average traded volume for the first three days of the week stood at $ 78.48 million. Some of the forward dollar rates that prevailed in the market, 1 month – 132.55; 3 months – 133.40 and 6 months – 134.58.