Bond yields see-saw during the week as the 364 day bill

Monday, 22 December 2014 00:00 - - {{hitsCtrl.values.hits}}

WAvg increases for the first time in ten weeks

By Wealth Trust Securities Activity in secondary bond markets moderated towards the later part of the week ending 19 December 2014 with yields fluctuating considerably during the week. The liquid 2018 maturities consistin

g of the 01.04.2018, 15.08.2018 and the 01.07.2019 and 01.07.2022 saw its yields dipping to weekly lows of 6.95%, 7.00%, 7.05% and 7.82% in comparison with the previous weeks closing levels of 7.00/05, 7.12/18, 7.15/19 and 8.09/12. However, selling interest subsequent to the weekly Treasury bill auction where the weighted average of the 364 day maturity increased by 01 basis point, resulted in yields increasing once again to weekly highs of 7.10%, 7.20%, 7.25% and 8.05% respectively. Furthermore, the seven year maturity of 01.05.2021 and ten year maturity of 01.01.2024 changed hands within the range of 7.60% to 7.75% and 7.94% to 8.05%. In the meantime, yields in the secondary bill market consisting of the May 2015 and November 2015 maturities were at levels of 5.77% to 5.82% and 5.95% to 6.00% respectively. In money markets, overnight surplus liquidity decreased considerably during the week to a five week low of Rs.1.74 billion on 18th December 2014. However it increased once gain on the 19th to close the week at Rs. 49.84 billion. As a result, overnight call money and repo rates increased marginally to average 6.00% and 5.55% respectively during the week in comparison to last week’s averages of 5.95% and 5.47%. The Open Market Operations (OMO) Department of Central Bank drained out a total amount of Rs. 55.67 billion by way of three term repo auctions for durations of seven days at a weighted average (WAvg) of 6.00%, 56 days at a WAvg of 6.07% and 77 days at a WAvg of 6.11%, valued Friday (19th). Furthermore, they also moped up on the 19th an amount of Rs. 6.71 billion on an overnight basis at a weighted average of 5.92%.

Rupee holds steady The rupee on spot next-next contracts traded within a thin band of Rs. 131.99/131.9975 throughout the week. The daily USD/LKR average traded volume for the first four days of the week stood at $ 45.87 million. Some of the forward dollar rates that prevailed in the market were 1 month – 132.46; 3 months – 133.40 and 6 months – 134.65.