Bond yields steady ahead of auctions

By Wealth Trust Securuties

Activity in the secondary bond market dropped considerably yesterday as yields were seen closing the day broadly steady ahead of two Treasury bond auctions due today.

A limited amount of activity was witnessed on the 1 July 2019 maturity within the thin range of 8.14% to 8.16% while the rest of the yield curve remained stagnant. The auction will see a total amount of Rs. 8 billion on offer consisting of Rs. 3 billion on a 4.8 year maturity of 1 May 2020 and Rs. 5 billion on a 10 year maturity of 1 August 2025. These two maturities fetched weighted averages of 8.39% and 9.63% respectively at its previous auctions.

Overnight call money and repo rates remained steady to average 6.13% and 5.88% respectively despite surplus liquidity dipping to Rs. 70.665 billion yesterday.

Rupee steady on thin trades

The USD/LKR rate remained steady at Rs. 133.75 yesterday on thin trades. The total USD/LKR traded volume for the previous day (7 August) was $ 42.27 million.

Some of the forward dollar rates that prevailed in the market were one month – 134.40/50; three months – 135.55/65 and six months – 137.00/20.