Bond yields increase marginally ahead of weekly bill auction

• Liquidity turns positive

 By Wealth Trust Securities

Secondary market bond yields were seen increasing marginally yesterday on the back of selling interest due to profit-taking ahead of today’s weekly Treasury bill auction. 

The maturities of 15.12.21, 01.08.24 and 01.08.26 were the more actively traded durations as it was seen hitting intraday highs of 11.43, 11.63% and 11.62% respectively against its previous day’s closing levels of 11.35/38 and 11.45/55 each. 

This was ahead of today’s weekly Treasury bill auction, where a total amount of Rs. 29.5 billion will be on offer consisting of Rs.12 billion of the 182 day and Rs. 14 billion of the 364 day maturities. The 91 day bill will make reappear after a lapse of two weeks consisting of an amount of Rs. 3.5 billion as well. 

At last week’s auction, weighted averages decreased further to record 10.43% and 10.73% respectively on the 182 day and 364 day maturities.

The total secondary market Treasury bond transacted volume for 12 May 2017 was Rs. 4.5 billion.

In money markets, the overnight repo rate decreased marginally to average 8.78% as net liquidity in the system reversed back to a surplus of Rs. 11.87 billion yesterday after a lapse of nine days. 

The OMO (Open Market Operations) Department of the Central Bank of Sri Lanka injected an amount of Rs. 3.00 billion on an overnight basis by way of a Reverse Repo auction at a weighted average of 8.75%.

 Rupee dips marginally 

The USD/LKR rate on spot next contracts depreciated once again to close the day at Rs.152.70/75 against its previous day’s closing levels of Rs. 152.55/70 on the back of importer demand.

The total USD/LKR traded volume for 15 May 2017 was $ 42.55 million.

Some of the forward USD/LKR rates that prevailed in the market were one month - 153.70/80; three months - 155.70/80 and six months - 158.55/65.