Secondary market bond activity dries up as yields hold steady
Thursday, 8 August 2013 00:00
-
- {{hitsCtrl.values.hits}}
By Wealth Trust Securities
Activity in secondary bond markets dried up yesterday as yields closed the day mostly unchanged following a three-and-a-half-year bond auction.
At the auction where an amount of Rs. 1 b was on offer, an amount of Rs. 1.6 b was accepted out of Rs. 2.97 b worth of total bids received at a weighted average (WAvg) of 10.87%.
A wait-and-see approach by most market participant ahead of next week’s monitory policy announcement due on 16 August coupled with the shortened week were seen as the reasons behind the lackluster environment in markets.
The liquid two five-years (i.e. 1 April 2018 and 15 August 2018) were the actively quoted maturities at levels of 11.28/32 and 11.34/38 respectively while the three-year,four-year and eight-year maturities were quoted at levels of 10.90/95, 11.15/30 and 11.55/65 respectively. In addition, the 364-day bill continued to change hands at levels of 10.55% in secondary markets.
Overnight surplus liquidity dipped marginally yesterday to Rs. 28.96 b as call money and repo were seen averaging 8.73% and 8.17% respectively. An amount of Rs. 10 b was drained out of the system on an overnight basis at a WAvg of 7.67% while a further Rs. 0.25 b was drained for a period of seven days at a WAvg of 7.95% by way of Repo auctions conducted by the Open Market Operations (OMO) department of Central Bank. In addition, an amount of Rs. 18.7 b was deposited at CBSL’s repo window of 7.00%.
Spot next contracts hold steady
In dollar/rupee markets, spot next contracts closed the day steady at Rs. 131.72/74 yesterday as importer demand was broadly met by export conversions while tom contracts were seen changing hands marginally lower at levels of Rs. 131.63. The total USD/LKR traded volume for the previous day (6 August 2013) stood at US$ 91.60 million.
Some of the forward dollar rates that prevailed in the market were one month – 132.53; three months 134.20; and six months – 136.35.
