Primary market yields continue its downward slope

Thursday, 14 November 2013 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities The Treasury bill weighted averages declined for the eighth consecutive week at this week’s auction held yesterday. The 182-day bill yields decreased the most by five basis points to 8.89% while the 364-day bills reflected a decrease of three basis points to 9.79%. The market favourite 364-day bill continued to dominate the auction as it represented 96% of the total accepted amount, which was Rs. 4.6 billion more than its initial offered amount of Rs. 7 billion.

However, in the secondary bond market, continued selling interest resulted in yields edging up mainly of the frequently traded maturities of 01.01.17 and of the two 2018s (i.e. 01.04.2018 and 15.08.2018). These yields increased intraday by seven basis points, eight basis points and 10 bp respectively from its opening lows of 10.80/85, 11.10/13 and 11.18/22 and continued to close the day at highs of 10.90/91, 11.18/22 and 11.28/30. In addition, a limited amount of activity was witnessed of the 15.07.2015 within the range of 10.25% to 10.30%. On the back of the results of the Treasury bill auction, secondary market bills dipped mainly of the May 2014 maturity as it was seen changing hands within the range of 8.95% to 9.05% while the latest 364-day maturity was quoted within the range of 9.78% to 9.82%. Overnight surplus liquidity dipped further to Rs. 4.10 billion yesterday. The Open Market Operations (OMO) department of the Central Bank continued to drain out an amount of Rs. 0.60 billion on a seven day basis at a WAvg of 7.48% while a further amount of Rs. 3.50 billion was deposited at its window rate of 6.50%. However, overnight call money and repo rates remained steady to average 7.76% and 7.04% respectively. Rupee remained steady In Forex markets, the USD/LKR rate remained steady yesterday; to close the day at Rs. 131.10/131.15. The total USD/LKR traded volume for the previous day (12.11.13) stood at $ 52.58 million.