Secondary market bond yields close steady ahead of weekly bill auction
Wednesday, 23 July 2014 00:00
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By Wealth Trust Securities
Secondary market bond yields were seen closing the day steady yesterday, subsequent to increasing during morning hours of trading. Activity was seen increasing, mainly surrounding the five year maturity of 01st July 2019 and the eight year maturity of 01st July 2022 as its yields increased during morning hours of trading to intraday highs of 7.90% and 8.52% respectively against its days opening lows of 7.83% and 8.41%. However, buying interest from this point onwards saw yields dip once again to close the day broadly unchanged against its previous day’s closing levels at 7.82/85 and 8.42/45 on the liquid two durations. Furthermore the two 2018 maturities (i.e. 01.04.2018 and 15.08.2018) were seen closing the day at levels of 7.54/56 and 7.57/62 respectively subsequent to hitting intraday highs of 7.66% and 7.65% as well. On the shorter end of the yield curve, maturities close to the two year duration were seen changing hands within the range of 6.93% to 6.97% while the three year maturity changed hands within the range of 7.25% to 7.28%. In addition, a limited amount of activity was witnessed on the fifteen year maturity of 2029 within the range of 9.85% to 9.90%.
Today’s weekly Treasury bill auction, at where an total amount of Rs 10 billion (Bn) will be on offer will consist of Rs 1 Bn each on the 91 day and 182 day maturities and Rs 8.0 Bn on the 364 day maturity. At last week’s auction, weighted averages (WAvg’s) continued its downward spiral, with the 364 day bill reflecting its sharpest drop in 26 weeks to hit a low of 6.79% in comparison to its previous weeks WAvg of 6.91%. This was closely followed by the 91 day and 182 day maturities as it reflected dips of 03 basis points and 04 basis points respectively to 6.46% and 6.59%. In secondary bill markets, October 2014 bills were seen changing hands within the range of 6.45% to 6.48%, December 2014 within 6.50% to 6.55% while the 364 day bill was quoted at 6.58/65.
Meanwhile in money markets, surplus liquidity remained healthy at Rs.22.98 billion as Central Bank refrained from conducting any Open market Operations (OMO) yesterday. The full amount was deposited at Central Bank’s Standing Deposit Facility Rate (SDFR) of 6.50%. Overnight call money and repo rates remained steady to average 6.72% and 6.51% respectively.
Rupee dips marginally
Continued importer demand saw the rupee close the day 02 cents lower at Rs 130.28/30 yesterday against its previous day’s closing of Rs 130.26/28. The total USD/LKR traded volumes for the 21st of July 2014 stood at US $ 98.25 million. Some of the forward dollar rates that prevailed in the market were 1 Month - 130.54; 3 Months -131.19 and 6 Months -132.24.
