Primary market TBill WAvg continues to slide; 364-day breaks psychological level

Thursday, 26 June 2014 00:00 - - {{hitsCtrl.values.hits}}

As anticipated the weighted averages (WAvgs) of the weekly Treasury bill auction dipped further. The 364-day bill declined by 1 basis point to break the psychological level of 7.00% while the 91-day and 182-day bills declined by 2 basis points each to 6.51% and 6.69%.

Interestingly the amount accepted from the 364-day maturity was double the offered amount of Rs. 10 billion, which in turn resulted in the Central Bank accepting a total an amount of Rs. 22 billion against an offered amount of Rs. 12 billion. In secondary bond markets, the decreasing trend witnessed during the early hours of trading came to a halt due to profit taking, subsequent to the release of the Treasury bill auction results. As a result yields closed the day marginally higher in comparison to its morning lows. The liquid two 2018 maturities (e.g. 01.04.2018 and 15.08.2018) and the 01.07.2019 saw its yields dipping to intraday lows of 8.20%, 8.30% and 8.69% respectively prior to closing the day at levels of 8.19/22, 8.30/32 and 8.69/71. Furthermore the 01.11.2015 maturity was seen changing hands within a range of 7.06% to 7.08% and 01.04.2016 maturity within range of 7.18% to 7.22% with large volumes been traded. In contrast the secondary market 364- day bills which were quoted between 6.95% and 7.00% prior to the auction were seen at levels of 6.93% to 6.97% after the auction. The 91-day bill too, which was at 6.55% to 6.60% in the morning, dropped to levels of 6.50% to 6.55% subsequent to the auction. Meanwhile in money markets, the total surplus of Rs. 6.15 billion was deposited at CBSL’s Standing Deposit Facility Rate (SDFR) at 6.50% as the Central Bank refrained from conducting any auctions under its Open Market Operations (OMO). This in turn kept overnight call money and repo rates steady to average 6.97% and 6.53%. Rupee remains stable Meanwhile in Forex markets yesterday, the USD/LKR rate remained mostly unchanged to close the day at Rs. 130.33/35. The total USD/LKR traded volumes on 24 June stood at $ 90.55 million. Some of the forward dollar rates that prevailed in the market were 1 Month: Rs. 130.78, 3 Months: Rs. 131.67 and 6 Months: Rs. 132.84.