Mixed response in secondary market bonds following primary auctions

By Wealth Trust Securities

The secondary bond market witnessed a mixed response in trading yesterday as yields on the auctioned maturities were seen increasing in comparison to its previous weeks’ closing levels while yields on eight-year maturity were seen declining.

At the auction, strong demand for the 3.11-year maturity of 01.07.2019 and the 6.00-year maturity of 01.08.2021 saw an total amount of Rs. 50.64 billion been accepted on these two maturities while all bids for the 10-year maturity of 01.08.2025 were rejected. Given below are the details of the auction,

In secondary market trading, yields were seen increasing in morning hours of trading mainly on the eight-year maturity of 01.09.2023 to intraday highs of 9.40%.

However, subsequent to the release of auction results yields dipped once again to hit an intraday low of 9.20% while the 01.08.2021 and 01.07.2019 maturities were seen changing hands within highs of 8.95% and 8.20% respectively to lows of 8.80% and 8.13%. Meanwhile at today’s weekly bill auction, held a day prior due to a shortened trading week, a total amount of Rs 19 billion will be on offer consisting of Rs.5 billion on the 91 day and Rs.7 billion each on the 182 day and 364 day maturities. At last week’s auction, weighted averages increased across all three maturities to record 6.25%, 6.38% and 6.39% respectively. Given below are the closing, secondary market yields for the most frequently traded maturities.

Meanwhile, in money markets, overnight call money and repo rates remained steady to average 6.14% and 5.83% respectively as surplus liquidity stood at a high of Rs. 83.54 billion.

Rupee remains stable

Meanwhile, in Forex markets, the USD/LKR rate on spot contracts remained steady for a fifth consecutive day to close at Rs. 133.70. The total USD/LKR traded volume for the previous day (24-07-15) stood at US $ 34.95 million.

Some of the forward dollar rates that prevailed in the market were 1 Month - 134.27/35; 3 Months - 135.15/30 and 6 Months - 136.50/70.