Mixed fortunes in secondary bond market ahead of weekly auction

By Wealth Trust Securities

The secondary bond market witnessed mixed fortunes yesterday as yields on the short end of the curve were seen increasing while yields on the belly end decreased ahead of today’s weekly Treasury bill auction. Selling interest on the 01.05.2020 and 15.10.2021 maturities saw its yields increase to daily highs of 11.85% and 12.17% respectively against its days opening lows of 11.75% and 12.10% while buying interest on the 01.01.2024 and 01.06.2026 maturities saw its yields dip to daily lows of 12.60% and 12.80% respectively against its opening highs of 12.70% and 12.87%.

Today’s weekly bill auction will have Rs. 29 billion on offer consisting of Rs. 10.5 billion each on the 91 day and 182 day maturities and a further Rs. 8 billion on the 364 day maturity. 

At last week’s auction, weighted averages increased for fifth consecutive week to 8.84%, 9.80% and 10.54% on the 91 day, 182 day and 364 day maturities respectively. 

The OMO (Open Market Operations) department of the Central Bank was seen injecting an amount of Rs. 20 billion on an overnight basis at a weighted average of 7.97% yesterday as repo and call money remained steady to average 8.07% and 8.18% respectively. The net deficit in the system stood at Rs. 30.35 billion yesterday.

 Rupee fluctuates during the day  

 In Forex markets, the USD/LKR rate on the active one week forward was seen dipping to an low of Rs. 148.50 yesterday in morning hours of trading on the back of importer demand and scarcity of dollars. 

However it was seen gaining towards the latter part of the day to close the day at its opening level of Rs. 147.20/70 as spot next contracts were seen changing hands at levels of Rs. 147.25 to selected buyers. Some of the forward USD/LKR rates that prevailed in the market were 1 Month - 147.70/20; 3 Months - 149.25/65 and 6 Months - 151.25/65.