Record 16th consecutive week drop on weekly averages

Thursday, 9 January 2014 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities The continued demand for shorter tenure maturities in secondary bond and bill markets saw weighted averages (WAvg’s) at yesterday’s weekly

Treasury bill auction drop for a record 16th consecutive week. The WAvg on the 364-day bill dipped the most by 53 basis points (bp) to 7.42% while the 91-day and 182-day bills reflected dips of by 42 bp and 33 bp respectively to 7.00% and 7.20%. The market favourite 364-day bill continued to dominate the auction as it represented 73% of the total accepted amount, which was Rs. 3.5 billion more than its initial offered amount of Rs. 8 billion. Activity in secondary bond markets continued to remain high yesterday amidst heavy volatility with the liquid two 2018 maturities (i.e. 01.04.2018 and 15.08.2018) trading within daily lows of 8.73% and 8.80% to highs of 8.82% and 8.88% respectively. In addition, a considerable amount of activity was witnessed on the liquid two 2019 maturities (i.e. 15.01.2019 and 01.07.2019) with ranges of 9.00%-9.05% and 8.98%-9.15% respectively. Meanwhile, demand for shorter tenure bond maturities saw the 2015 been quoted at levels of 7.50%-7.70% while 2016 were seen changing hands within the range of 7.85% to 8.15%. In secondary bill markets, the 364-day bill was seen been quoted at levels of 7.30% to 7.35% post auction while 182-day bills were seen changing hands at levels of 7.00% to 7.10%. Meanwhile in money markets, an amount of Rs. 64.47 billion was deposited at CBSL’s Standing Deposit Facility Rate (SDFR) of 6.50% yesterday as the Open Market Operations (OMO) department continued to refrain from conducting any auctions for a third consecutive day. Overnight call money and repo rates remained steady to average 7.40% and 6.84% respectively. Rupee remains stable Meanwhile in Forex markets yesterday, the USD/LKR rate remained mostly unchanged to close the day at Rs. 130.80/85. The total USD/LKR traded volume for the previous day (7 January 2013) stood at $ 59.32 million. Some of the forward dollar rates that prevailed in the market were 1-Month: Rs. 131.14, 3-Months: Rs. 131.74 and 6-Months: Rs. 132.66.