Primary market rates decline further ahead of budget reading
Thursday, 21 November 2013 00:00
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By Wealth Trust Securities
The increasing trend in secondary market bonds yields witnessed over the previous day came to halt yesterday as yields even decreased marginally towards the later part of the day as weighted averages (WAvgs) at the weekly Treasury bill auction declined for a 9th consecutive week.
The WAvgs on the 182-day and 364-day maturities decreased by 4 basis points each to 8.85% and 9.75% respectively while the WAvg on the 91-day bill, which was accepted for the first time in four weeks was at 8.10%.
Interestingly, the accepted amount on the 182-day bill was the highest in 21 weeks which intern saw the 364-day bill represent only 68.9% of the total accepted amount against its last week figure of 96%.
The most liquid maturities of 1 January 2017 and the two 2018s (i.e. 1 April 2018 and 15 August 2018) edged up to daily highs of 10.84%, 11.12% and 11.24% respectively in morning hours of trading in comparison to its previous day’s closing levels of 10.82/85, 11.11/14 and 11.23/27. However, yields dipped towards the latter part of the day once again following the outcome of the auction to hit daily lows of 10.78%, 11.06% and 11.20% respectively. In addition, yields on the two and three-year maturities were seen dipping as well to lows of 10.00% and 10.38% respectively against its opening levels of 10.10/20 and 10.45/50.
Meanwhile in secondary bill markets, May 2014 maturities were seen changing hands within the range of 8.70% to 8.90%, September 2014 within 9.55% to 9.65%, October 2014 within 9.60% to 9.73% and the latest 364-day bill within 9.63% to 9.70% reflecting continued demand.
In money markets, overnight call money and repo rates remained steady to average 7.75% and 7.03% respectively despite surplus liquidity decreasing further to Rs. 10.14 billion yesterday. The Open Market Operations (OMO) department of the Central Bank was seen mopping up an amount of Rs. 4.8 billion on a seven-day basis at a WAvg of 7.47% while a further amount of Rs. 5.34 billion was deposited at its window rate of 6.50%.
Rupee continues to be steady
In Forex markets, the USD/LKR rate on all contracts (i.e. cash, tom, spot and spot next contracts) remained steady yesterday at levels of Rs. 131:08/10, Rs. 131: 09/10, Rs. 131: 10/15 and Rs. 131: 16/19, respectively, as markets remained at an equilibrium.
The total USD/LKR traded volume for the previous day (19 November 2013) stood at $ 71 million.
Some of the forward dollar rates that prevailed in the market were 1-Month: Rs. 131.96, 3-Months: Rs. 133.61 and 6-Months: Rs. 135.94.
