Primary market yields continue its downward slope

Thursday, 25 July 2013 00:51 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities Despite all bids for the benchmark 91 day and 182 day Treasury bills been rejected for the first time in 33 and 16 weeks respectively at the weekly Treasury bill auction held yesterday, the total offered amount of Rs.10 Bn was mostly subscribed due to the demand for the 364 day maturity. The weighted average of the 364 day maturity decreased by a further three basis points to 10.56% in comparison with the previous week.

In line with the outcome of the auction, buying pressure on secondary market bills centering on the 182 day and 364 day maturities was evident as it was seen changing hands within the range of 9.65% to 9.80% and 10.50% to 10.55% respectively. In addition, buying interest on the liquid two five year maturities (i.e. 01.04.2018 and 15.08.2018) saw its yields dip as well as it was seen hitting intraday lows of 11.27% and 11.33% respectively while the thee year maturity was seen closing the day at levels of 10.95/00. Surplus liquidity drops to its lowest since SRR cut In money markets, surplus liquidity dried up yesterday to Rs 0.41 Bn as the Open Market Operations (OMO) department of Central Bank refrained from conducting daily repo auction for the first time this month. This led to the weighted averages of overnight call money and repo rates increasing marginally to 8.74% and 8.23% respectively. The Central bank discount window was accessed at of 9.00% for amount of Rs. 1.06 billion. Rupee remains mostly unchanged Dollar rupee rate remained steady as trades on spot next contract fixed at Rs.131.60, while the trades on spot contracts were moderated. The total USD/LKR traded volume for the previous day (23-07-13) stood at US $ 67.27 million. Some of the forward dollar rates that prevailed in the market were 1 Month – 132.35; 3 Months- 133.90 and 6 Months- 136.05