Primary auction rates continue to tumble at weekly auction

Thursday, 14 August 2014 00:39 - - {{hitsCtrl.values.hits}}

Secondary market bond yields move in opposite direction

By Wealth Trust Securities Driven by robust demand, the weighted averages (WAvg) at yesterday’s weekly Treasury bill auction dipped further as the total accepted amount continued to exceed its total offered amount.

Once again it was the 364 day bill which reflected the sharpest decline of 14 basis points to record a WAvg of 6.31% while the 91 day and 182 day bills dipped by nine basis points each to record WAvg’s of 6.19% and 6.30% respectively. The market favourite 364 day bill continued to dominate the auction as it represented 77% of the total accepted amount, which was Rs. 1.5 billion more than its initial offered amount of Rs. 12 billion. However surprisingly, contrary to the movement in primary market yields, the upward trend in secondary market bond yields continued yesterday as well. Once again activity surrounded the maturities of 1 July 2019 and 1 July 2022 as it was seen hitting intraday highs of 7.08% and 7.94% respectively against its previous day’s closing levels of 6.98/02 and 7.76/80. In addition, the two 2029s (i.e. 1 January 2029 and 1 May 2029) were seen changing hands within the range of 9.12% to 9.17% while the 1 January 2024 maturity were seen closing the day at levels of 8.15/20. In secondary bill markets, the 364 day bill, which was quoted at levels of 6.30% to 6.35% pre-auction, was quoted at levels of 6.22% to 6.28% post auction. In money markets, the overnight call money and repo rates remained steady to average 6.72% and 6.55% respectively yesterday, as no auctions under its Open Market Operations (OMO) were conducted for a third consecutive day. The total surplus amount of Rs. 17.72 b was deposited at Central Bank’s Standing Deposit Facility Rate (SDFR) of 6.50%. Rupee closes the day steady The dollar/rupee rate remained mostly unchanged within the range of Rs. 130.18 to Rs. 130.22 yesterday. The total USD/LKR traded volumes for 12 August stood at $ 30.60 million. Some of the forward dollar rates that prevailed in the market were: one month – 130.53; three months – 131.15; and six months – 132.15.