Secondary bond market activity dries up ahead of Treasury bond auctions

Tuesday, 17 March 2015 01:17 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities Activity in secondary bond markets dried up yesterday as yields edged up marginally with two-way quotes mainly seen on the liquid three 2018 maturities (i.e. 01.04.2018, 01.06.2018 and 15.08.2018), the 01.07.2022 and the 01.09.2023 maturities at levels of 8.45/55, 8.77/80, 8.50/70, 9.05/15 and 9.65/68 respectively. This was mainly due to a patient approach by most market participants ahead of two Treasury bond auctions due today and the monetary policy

announcement for the month of March due on 18 March (Wednesday). At today’s bond auction, a total of Rs. 14 billion will be on offer consisting of Rs. 7 billion each on durations of 4.06 years and 6.04 years. In money markets, the Central Bank’s Open Market Operations (OMO) Department was seen mopping up excess liquidity by way of five auctions for outright sales of Treasury bills. The auction drained Rs. 25 billion in total at weighted average of 6.56% for four days, 6.57% for 11 days, 6.50% for 25 days, 6.57% for 32 days and 6.70% for 46 days. Overnight call money and repo rates remained steady to average 6.70% and 6.61% respectively. Rupee remained steady In Forex markets, the USD/LKR rate on one-week forward contracts remained mostly unchanged yesterday; to close the day at Rs. 133.60/133.75. The total USD/LKR traded volume for 13 March 2015 was at $ 65.50 million. Some of the forward USD/LKR rates that prevailed in the market were 1 Month - 134.35; 3 Months - 135.40 and 6 Months - 137.40.