Secondary market bond yields continue to decrease ahead of weekly bill auction

By Wealth Trust Securities

The secondary bond market continued to remain very active as yields declined further on the back of  substantial buying interest, ahead of the weekly treasury bill auction, due to be held today.

The liquid maturities of 01.03.21, 01.10.22, 01.09.23, 01.08.24, 15.03.25 and the two 2026’s (i.e. 01.06.26 and 01.08.26) were seen hitting intraday lows of 11.07%, 11.32%, 11.38%, 11.50%, 11.55%, 11.65% and 11.63% respectively against its previous day’s closing levels of 11.28/30, 11.58/62, 11.68/70, 11.70/74, 11.84/88, 11.86/90 each. Furthermore, maturities of 15.10.2018, 15.09.19, 01.09.28 and 15.05.30 were seen changing hands at lows of 10.75%, 10.90%, 11.83% and 11.95% as well. In the secondary bill market, September 2017 maturities were brought down up to a low of 10.45%.

Today’s bill auction, will have on offer a forty week low volume of Rs. 11 billion, consisting of Rs. 1 billion of the 91 day, Rs. 2 billion of the 182 day and Rs. 8 billion of the 364 day maturities. 

At last week’s auction, the weighted averages of the 91 day and 364 day maturities decreased to 9.03% and 10.73% respectively, with the weighted average of the 182 day maturity remaining steady at 9.94%. Meanwhile in money markets, despite a liquidity shortfall of Rs. 1.88 billion, the overnight call money and repo rates remained mostly unchanged to average 8.40% and 8.57% respectively yesterday. 

Rupee remains steady

 In Forex markets yesterday, the spot/spot next as well as one week forward contracts remained mostly unchanged to close the day at Rs.145.42/47, Rs.145.44/50 and Rs.145.58/68 respectively.  

The total USD/LKR traded volume for the 05th of September 2016 was  $ 26.60 million. 

Some of the forward USD/LKR rates that prevailed in the market were 1 Month - 146.35/45; 3 Months - 147.90/00 and 6 Months -150.20/30.