Primary market rates continue to increase

Friday, 27 May 2016 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The weighted averages at yesterday’s Treasury bond auctions were seen increasing in comparison to its weighted averages recorded at the previous bond auctions conducted on 19 May.

The 07.07 year maturity of 01.01.2024 recorded a weighted average of 12.77% well above its previous weighted average of 12.40% and the 10 year maturity of 01.06.2026 recorded a weighted average of 12.98% against its previous one of 12.82%.

Furthermore the 2.04 year maturity of 15.10.2018 recorded a weighted average rate of 11.83%, above the 11.75% recorded for the 2.05 year maturity of 15.11.18 while the weighted average on the 5.04 year maturity of 15.10.2021 stood at 12.48%. The total accepted amount stood at Rs.47.7 billion against its total offered amount of Rs.45 billion.

Activity in secondary bond markets was seen increasing drastically yesterday as yields were seen decreasing following the auction outcome, on the back of considerable buying interest.

Activity centred on the liquid maturities of 15.10.21, 01.01.2024 and 01.06.2026 as its yields dipped to intraday lows of 12.35%, 12.55% and 12.65% respectively against its highs of 12.45%, 12.65% and 13.00%.

Meanwhile in money markets, the overnight repo rate decreased further to average at 7.98% as the net surplus liquidity in the system stood at Rs.9.48 billion yesterday. The overnight call money rate averaged at 8.15%.

Rupee dips further

The rupee on the spot next contract dipped further yesterday to close the day at Rs.147.30/60 on the back of continued importer demand. The total USD/LKR traded volume for 25 May was $ 73.80 million. Given are some forward USD/LKR rates that prevailed in the market: one month – 148.25/35; three months – 149.80/00; six months – 152.20/40.