Drop in WAvgs for 10th consecutive week inspires secondary bond markets
Thursday, 28 November 2013 00:00
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By Wealth Trust Securities
Activity in secondary bond markets picked up yesterday as weighted averages (WAvgs) at the weekly Treasury bill auction declined for a 10th consecutive week.
The WAvgs on the market favorite 364 day bill decreased the most by six basis points to 9.69% while the WAvgs on the 91 day and 182 day bills decreased by four and five basis points respectively to 8.06% and 8.80%.
The 364 day maturity continued to dominate the auction as it represented 75% of the total accepted amount of Rs. 19.6 b, which was Rs. 8.6 b higher than the initial total offered amount of Rs. 11 b.
The most liquid durations of two-years (15 July 2015), two-and-a-half years (1 April 2016), three-and-a-quarter years (1 January 2017) and five years (i.e. 1 April 2018 and 15 August 2018) saw its yields decline to daily lows of 10.00%, 10.35%, 10.75%, 11.08% and 11.20% respectively in comparison to its previous day’s closing levels of 10.03/08, 10.42/44, 10.80/83, 11.11/14 and 11.22/25 as activity increased.
Meanwhile in secondary bill markets, continued demand post and pre auction saw January 2014 maturities changing hands within the range of 8.10% to 8.25%, February 2014 within 8.15% to 8.30%, May 2014 within 8.60% to 8.75%, August 2014 within 9.20% to 9.35%, October 2014 within 9.50% to 9.55% and the latest 364 day bill within 9.60% to 9.65%.
In money markets, the overnight call money and repo rates remained steady to average 7.78% and 7.05% respectively as surplus liquidity stood at Rs. 10.08 b yesterday. The Open Market Operations (OMO) department of Central Bank was seen mopping up liquidity on a seven day basis for an amount of Rs. 3.80 billion at a weighted average of 7.44% while a further Rs. 6.68 b was deposited at its widow rate of 6.50%.
Rupee holds steady
In Forex markets, the rupee on spot contracts closed the day steady yesterday at Rs. 131.15/20 while the rate on spot next contracts was seen appreciating to a daily high of Rs 131.30 against its low of Rs. 131.40 and its previous day’s closing of Rs. 131.40/45. The total USD/LKR traded volume for the previous day (26 November 2013) stood at US$ 57.45 million.
Some of the forward dollar rates that prevailed in the market were one month – 132.08; three months – 133.70; and six months -136.05.
