Primary and secondary market treasury yields plunge once again

Thursday, 12 December 2013 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities The weighted averages (Wavg’s) at yesterday’s Treasury bill auction dipped considerably reflecting its 12th consecutive week of declines to its lowest levels recorded in two years. It was the 364-day bill which reflected the sharpest decline of 35 basis points (bp) to 9.15% whilst the 91-day bill and 182-day bills dipped by 12 bp and 17 bp respectively to 7.85% and 8.48%. Interestingly the accepted amount on the 364-day bill was Rs. 3.3 billion higher than its initial offered amount of Rs. 8.5 billion, which intern saw the total accepted increase to Rs. 11.3 billion as well against its initial total offered amount of Rs. 10 billion. Along with the expectations of the weekly Treasury bill auction and its outcome, activity in secondary bond markets picked up yesterday across all maturities ranging from the 2015 to 2018 with considerable volumes being traded. The two liquid 2018 maturities (i.e. 01.04.2018 and 15.08.2018) were the more active durations as its yields opened the day at levels of 10.58/62 and 10.62/68 respectively and dropped down to intraday and twenty two (22) month lows of 10.25% and 10.30%. In addition, activity on the 01.04.2016 and 01.01.2017 maturities was witnessed as well within the ranges of 9.60% to 9.75% and 9.75% to 9.85% respectively while the 364-day bill was seen been quoted at levels of 8.85/00 in secondary markets. Meanwhile in money markets, the weighted averages on overnight call money and repo rates remained steady at 7.75% and 7.05% respectively as surplus liquidity in money markets stood at Rs. 34.46 billion yesterday. The Open Market Operations (OMO) department of Central Bank was seen mopping up Rs. 3 billion on a two-day basis at a weighted average of 7.10% while further amount of Rs. 31.46 billion was deposited at its widow rate of 6.50%. Rupee stable The USD/LKR rate was seen trading within a thin band of Rs. 130.80 to Rs. 130.87 yesterday. The total USD/LKR traded volume for the previous day (10-12-13) stood at $ 40.95 million. Some of the forward dollar rates that prevailed in the market were 1-Month: Rs. 131.51; 3-Months: Rs. 132.77 and 6-Months: Rs. 134.77.