Secondary bond markets at a standstill ahead of weekly Treasury bill auction

By Wealth Trust Securities

The secondary bond market was at a complete standstill yesterday, with market participants awaiting more clarity regarding the withholding tax and other taxes mentioned in the 2017 Budget.

In the meantime, today’s Treasury bill auction will have on offer a total amount of Rs. 29.5 billion, consisting of Rs. 7.5 billion of the 91 day maturity, Rs. 12 billion of the 182 day maturity and a further amount of Rs. 10 billion of the 364 day maturity. 

At last week’s auction, the weighted averages increased by nine and four basis points respectively to 9.56% and 10.14% on the 182 day and 364 day maturities, while the yield of the 91 day maturity remained unchanged at 8.60%. 

In money markets, the overnight call money and repo rates averaged 8.44% and 8.72% respectively as the Open Market Operations (OMO) Department of the Central Bank of Sri Lanka injected an amount of Rs. 45.00 billion on an overnight basis by way of a Reverse Repo auction at a W. Avg of 8.49%. The net deficit in the system stood at Rs. 45.43 billion.  

Rupee losses    

 The USD/LKR rate on one week forward contract’s depreciated yesterday to close the day at Rs. 148.60/75 against the previous day’s closing levels of Rs. 148.30/40 on the back of importer demand and a globally strengthening dollar. The spot next contracts closed at Rs. 148.45/55. The total USD/LKR traded volume for the 11 November 2016 was $ 65.50 million.

 Some of the forward USD/LKR rates that prevailed in the market were one month - 149.30/50; three months - 151.05/20 and six months - 153.50/75.