Primary market WAvg continue to slide; 364-day bill hits 21-month low
Thursday, 31 October 2013 00:43
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By Wealth Trust Securities
As anticipated and continuing the momentum from Tuesday’s bond auction, weighted averages (WAvgs) at yesterday’s Treasury bill auction dipped further for a sixth consecutive week. It was the 364-day bill which reflected the sharpest decline of 19 basis points to 9.83% to reflect a 21-month low while the 182-day bill dipped by 11 basis points to 9.00%. However the all bids received for the 91-day bill were rejected once again.
Interestingly the accepted amount on the 364-day bill was more than double its initial offered amount of Rs. 8 billion, which in turn helped the Central Bank accept in total an amount of Rs. 20.2 billion at the auction against its initial total offered amount of Rs. 10 billion in total.
Nevertheless in secondary bond markets, the decreasing trend witnessed during early hours of trading yesterday reversed subsequent to the release of the auction as yields closed the day marginally higher in comparison to its previous day’s closings.
The liquid two five-year maturities (e.g. 1 April 2018 and 15 August 2018) saw its yields dip to intraday lows of 10.77% and 10.84% respectively and closed the day at levels of 10.80/83 and 10.87/90 subsequent to hitting intraday highs of 10.80% and 11.88%.
Furthermore the 1 January 2017 maturity was seen changing hands within a daily low of 10.60% to a high of 10.64% while the 1 April 2016 maturity within range of 10.20% to 10.30% as volumes remained very high.
In contrast in secondary market bills, the 364-day bill was seen changing hands at levels of 9.85% to 9.80% pre-auction and 9.75% to 9.80% subsequent to the auction and the 182-day bill at 8.95% to 9.00% pre auction and 8.90% to 8.95% subsequent to auction reflecting continued demand.
The Central Bank continued to mop up liquidity on a seven day basis for an amount of Rs. 8 billion at a WAvg og 7.46%, while a further Rs. 8 billion was deposited at its repo window of 6.50% bringing surplus liquidity to Rs. 16 billion yesterday. This in turn saw overnight call money and repo rates dip marginally to average 7.8% and 7.06% respectively.
Rupee appreciates once again
In dollar/rupee markets, spot contracts were seen changing hands within a narrow range of Rs. 131.00 to Rs. 131.05 and closed the day marginally stronger at Rs. 131.00/05 in comparison to its previous day’s closing level of Rs. 131.10/15. The total USD/LKR traded volume for the previous day (27 October 2013) stood at $ 31.57 million.
Some of the forward dollar rates that prevailed in the market were 1-Month: Rs. 131.90, 3-Months: Rs. 133.58 and 6-Months: Rs. 135.98.
