Mixed fortunes at weekly Treasury bill auction

• Accepted amount dips to 6-week low
• Upward trend in bond yields persist ahead of bond auctions

By Wealth Trust Securities

The weekly Treasury bill auction witnessed mixed fortunes yesterday, as the weighted average on the 364 day maturity was seen increasing for a second consecutive week while the weighted average on the 182 day bill recorded a surprise decrease. 

The 364 day bill reflected an increase of 10 basis points to 10.37% while the 182 day bill decreased by 23 basis points to 9.40%. However all bids received on the 91 day bill were rejected as the total accepted amount recorded a six week low of Rs.8.2 billion against its total offered amount of Rs.30 billion.

In secondary bond markets yesterday, activity moderated as yields continued to increase mainly on the long end of the curve. The 01.09.2028 and 15.05.2030 maturities saw its yields hit intraday highs of 12.30% each as two way quotes on the rest of the curve increased as well. 

This was ahead of today’s Treasury bond auctions where a total amount of Rs.19 billion will be on offer consisting of Rs.5 billion each on a 02.06 year maturity of 15.11.2018, a 4.00 year maturity of 01.05.2020 and a 6.05 year  maturity of 01.10.2022. 

A further Rs.4 billion will be on offer on a 7.08 year maturity of 01.01.2024. The previously conducted auctions on 28 April saw the 15.11.2018, 01.05.2020 and 01.10.2022 record weighted averages of 11.53%, 11.78% and 11.98% respectively. 

In money markets yesterday, overnight call money and repo rates remained mostly unchanged to average 8.15% and 8.01% respectively as the net surplus liquidity increased to Rs.13.27 Bn. 

 Rupee remain steady

The USD/LKR rate on the active spot next contract remained mostly unchanged to close the day at Rs.146.25/30. The total USD/LKR traded volume for 10 May was $ 105.25 million. Given are some forward USD/LKR rates that prevailed in the market: one month – 147.00/15; three months – 148.50/60; six months – 150.80/10.