Primary market averages increase

By Wealth Trust Securities

The weighted averages at yesterday’s Treasury bond auctions were seen increasing in comparison to its weighted averages recorded at its previous bond auctions conducted on 27 December 2016. 

The 7.07 year maturity of 01.08.24 and the 9.07 year maturity of 01.08.26 recorded weighted averages of 12.16% and 12.21% respectively, above its 11.98% and 12.11% recorded previously. 

The weighted averages on the second year maturity of 15.01.2019 and the 4.11 year maturity of 15.12.2021 were recorded at 11.41% and 12.16% respectively with the total accepted volume recording Rs. 54.96 billion against its total offered volume of Rs. 55 billion. 

In the secondary bond market yesterday, activity centered on the maturities of 15.11.18, 15.01.19, 01.08.21 and 01.08.26 at levels of 11.20%, 11.40%, 12.07% to 12.12%, and 12.25% to 12.29% respectively. The belly end of the yield curve consisting of the 2021 to the 2026 maturities continued to remain flat as its yields were bunged off from 12.10% to 12.25%.

This was ahead of today’s weekly Treasury bill auction, where a total amount of Rs. 24 billion will be on offer consisting of Rs. 5 billion on the 91 day maturity, Rs. 10 billion on the 182 day maturity and a further Rs. 9 billion on the 364 day maturity. 

At last week’s auction, weighted averages increased across the board for a fifth consecutive week to record 8.78%, 9.79% and 10.22% respectively.

In money markets, the overnight call money and repo rates averaged 8.31% and 8.57% respectively as net surplus liquidity stood at Rs. 66.79 billion yesterday. The OMO (Open Market Operations) department of the Central Bank was seen mopping up an amount of Rs. 54.00 billion on an overnight basis by way of a Repo auction at a weighted average rate of 7.40% while all attempts to drain out liquidity on a permanent basis were unsuccessful.

Rupee appreciates   

In Forex markets, the USD/LKR rate on the two-week and one-month forward contracts appreciated marginally to close the day at Rs. 150.45/60 and Rs. 151.00/20 against its previous day’s closing levels of Rs. 150.60/70 and Rs. 151.15/25.

The total USD/LKR traded volume for 6 January 2017 was $ 67.98 million. 

Some of the forward USD/LKR rates that prevailed in the market were three months - 152.55/80 and six months - 154.70/00.