Bond markets remain bullish ahead of second Treasury bill auction for the week
Friday, 11 April 2014 00:00
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By Wealth Trust Securities
The downward movement in secondary market bond yields continued yesterday as well with the liquid two 2018 maturities (i.e. 1 April 2018 and 15 August 2018) the 1 July 2019 and the 1 May 2021 being the most active durations, as its yields were seen hitting intraday lows of 8.72%, 8.81%, 9.01% and 9.80% respectively against its previous days closings of 8.73/76, 8.84/90, 9.03/04 and 9.86/89.
In addition, the one and a half year maturity of 1 November 2015 was seen dipping as well to trade within the range of 7.37% to 7.42% while the 364 day bill was quoted at levels of 7.00/04.
Today’s Treasury bill auction, the second of such for this week due to the following week consisting of only two working days, will have on offer Rs. 10 billion in total consisting of Rs. 0.5 b on the 91 day, Rs. 2 b on the 182 day and Rs. 7.5 b on the 364 day maturities respectively. At Wednesday’s auction, weighted averages (WAvgs) dipped by one basis point each on all three maturities to 6.63%, 6.80% and 7.04% respectively.
Meanwhile in money markets, the Open Market Operations (OMO) department of Central Bank mopped up in total an amount of Rs. 32.60 billion from the system through three term repo auctions yesterday at yields of 6.69% for 28 days, 6.79% for 63 days and 6.81% for 77 days respectively, valued today.
In the meantime the surplus liquidity of Rs. 6.91 billion was deposited at CBSL’s Standing Deposit Facility Rate (SDFR) at 6.50% as overnight call money and repo rates remained mostly unchanged to average 6.98% and 6.53% respectively.
Rupee remains stable
In Forex markets, the USD/LKR rate remained steady to close the day at Rs. 130.60/130.62 as markets were at equilibrium. The total USD/LKR traded volume for the previous day (9 April 2014) stood at $ 61.60 million.
Some of the forward dollar rates that prevailed in the market were: one month – 131.18; three months – 132.25; and six months – 133.80.
