Primary yields continue to remain stagnant

Thursday, 27 November 2014 00:00 - - {{hitsCtrl.values.hits}}

Total accepted amount dips below total offered amount for first time in 11 weeks

By Wealth Trust Securities The weighted average on the 364-day bill continued to remain steady at 6.00% for a seventh consecutive week at yesterday’s weekly Treasury bill auction. The weighted average on the 182-day bill, which was offered after a lapse of one week, remained steady as well at 5.84%. However, interestingly, the total accepted amount was seen dipping below the total offered amount for the first time in 11 weeks. Activity in secondary bond markets dried up considerably yesterday with two-way quotes mainly seen on the liquid maturities of 1 April 2018, 15 August 2018, 1 July 2019 and 1 July 2022 within the range of 7.10/20, 7.22/28, 7.25/35 and 8.10/15 respectively. In the secondary bill markets, the 182- and 364-day bills were quoted at levels of 5.80/90 and 5.95/05 post auction. The overnight call money and repo rates averaged at 6.00% and 5.50% respectively as liquidity stood at surplus of Rs. 11.09 billion. Downward trend on rupee continues In Forex markets, the dollar/rupee (USD/LKR) rate on spot next-next contracts (four-day forwards) depreciated further yesterday to an intraday low of Rs. 132.50 before closing the day at levels of Rs. 132.25/132.50, in comparison to its previous day’s closing level of Rs. 131.90/00. The total USD/LKR traded volume for 25 November was at $ 49.80 million. Some of the forward dollar rates that prevailed in the market were: three months – 133.10 and six months – 134.43.

Rupee forwards fall on dollar demand from importers

Reuters: Rupee forwards fell on Tuesday due to dollar demand by importers, but the Central Bank prevented further declines in the currency through moral suasion even as political uncertainty weighed ahead of the 8 January presidential polls, dealers said. Eight loyalists from President Mahinda Rajapaksa’s United People’s Freedom Alliance, including Health Minister Maithripala Sirisena, have defected since Rajapaksa announced the snap poll last week. Sirisena has resigned to contest against Rajapaksa as the consensus candidate of a united Opposition. The four-day forwards, or spot-next-next, were actively traded, dealers said, touching an intraday low of 132.50 before paring some losses to close at 132.25/35. On Tuesday, it closed at 131.90/132.00. The spot currency and three-day forwards, or spot-next, were not traded after the country’s central bank capped the currency at predetermined levels to prevent volatility. Central Bank officials were not available for comment. “The depreciation trend will remain at least until mid-December due to seasonal imports. Then, we expect the currency to recover due to inflows from remittances until March next year,” a currency dealer said. Exporters and banks were reluctant to sell dollars on expectation the currency would weaken further amid the fluid political situation, they added. Overseas investors bought a net Rs. 457.8 million worth Government securities during the week ended 19 November. They sold a net Rs. 39.1 billion ($298.5 million) in the eight weeks through 19 November, data from the Central Bank showed.