Secondary bond market yields decrease ahead of weekly bill auction

By Wealth Trust Securities

The secondary bond market remained active yesterday as yields were seen decreasing once again across the yield curve, reversing an upward trend witnessed during later part of the previous day. 

Buying interest on the liquid two 2024 maturities (i.e. 01.01.24 and 01.08.24) saw its yields decrease to 12.30% and 12.32% respectively against its previous day’s closing levels of 12.45/50 and 12.50/60. In addition, the 01.07.19 maturity and the 2021 maturities (i.e. 01.03.21, 01.08.21 and 15.12.21) were seen dipping to lows of 11.70% and 12.00% respectively as well. 

This was ahead of today’s weekly Treasury bill auction, where a total of Rs. 29.5 billion is on offer consisting of Rs. 4.00 billion on the 91 day, Rs. 12.5 billion on the 182 day and a further Rs. 13.0 billion on the 364 day maturity. At last week’s auction, the weighted averages on the 182 day and 364 day bills increased by two basis points each to 10.79% and 11.11% while the weighted average on the 91 day increased by one basis point to 9.73%. 

In secondary market bills, August 2017 maturities were seen changing hands within the range of 10.10% to 10.12%.

The total secondary market Treasury bond transacted volume for 24 April 2017 was at Rs. 3.5 billion.

In the money market, only an amount of Rs. 18 billion was drained out by the Open Market Operations (OMO) Department of the Central Bank on an overnight basis at a weighted average of 7.29% by way of an overnight repo auction as the net surplus liquidity in the system decreased to Rs. 16.92 billion yesterday. The overnight call money and repo rates averaged 8.75% and 8.53% respectively. 

Rupee depreciates marginally    

The USD/LKR rate on the two week forward contract was seen depreciating marginally yesterday to close the day at levels of Rs. 153.25/30 against its previous day’s closing levels of Rs. 153.10/20 on the back of importer demand. 

The total USD/LKR traded volume for 24 April 2017 was $ 76.45 million. 

Some of forward USD/LKR rates that prevailed in the market were one month - 153.75/90; three months - 156.20/30 and six months - 159.30/45.