Continuous demand sees primary auction yields dip for 26th consecutive week

Thursday, 20 March 2014 00:34 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities The continuous demand for short tenure durations reflected favorably at this week’s Treasury bill auction as well as weighted averages declined for a 26thconsecutive week. The 91 day bill reflected the sharpest decline of three basis points (bp) to 6.66% while the 182 day and 364 day bills dipped by two bp and one bp respectively to 6.83% and 7.05%. The total accepted amount exceeded the total offered amount for an eighth consecutive week as the 364 day bill represented 70.37% of this volume, asserting markets continued appetite for this duration. Activity in secondary bond markets continued to remain high yesterday as yields were seen dipping in morning hours of trading, mainly on the liquid two four year maturities of 1 April 2018 and 15 August 2018 to daily lows of 8.98% and 9.05% respectively and the five year maturity of 1 July 2019 to 9.42%. However, profit taking at these levels curtailed any further downward movement as yields were seen closing the day mostly unchanged once again in comparison to its previous day’s closing levels. In secondary bill markets, post auction the 182 day bill was seen quoted at levels of 6.75/80 and the 364 day at 7.00/05. Meanwhile in money markets, the Open Market Operations (OMO) department of Central Bank was seen mopping up an amount of Rs. 10 b on a two day basis at a WAvg of 6.59% by way of a repo auction as surplus liquidity stood at Rs. 14.66 b yesterday. Overnight call money and repo rates remained steady to average 6.90% and 6.40% respectively.

Rupee remains stable In Forex markets, the USD/LKR rate remained mostly unchanged to close the day at levels of Rs. 130.58/60 against its previous day’s closing of Rs. 130.59/62. The total USD/LKR traded volume for the previous day (18 March 2014) stood at US $ 49.85 million. Some of the forward dollar rates that prevailed in the market were: one month – 131.17; three months – 132.19; and six months – 133.64.