Secondary market bond yields continue to drop ahead of weekly auction

Wednesday, 22 April 2015 00:03 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities The downward trend in secondary market bond yields continued yesterday as well, driven by the outcome of the Treasury bond auctions.

At the auction, the 3.02 year maturity of 01.06.2018 fetched a weighted average of 8.15% while all bids for the 7.02 year maturity of 01.07.2022 were rejected. A continued ‘Seller’s Market’ saw yields on the liquid maturities of 15.05.2017, 01.06.2018, 15.09.2019, 01.06.2020, 01.08.2021, 01.09.2023 and 15.03.2025 dip to intraday lows of 7.32%, 8.09%, 8.30%, 8.55%, 8.65%, 8.99% and 9.30% respectively against its days opening highs of 7.40%, 8.15%, 8.35%, 8.60%, 8.79%, 9.23% and 9.45% as volumes changing hands remained high. Furthermore, at today’s Treasury bill auction a total amount of Rs. 24 billion will be on offer consisting of Rs. 4 billion on the 91 day, Rs. 8 billion on the 182 day and Rs. 12 billion on the 364 day maturities respectively. At last week’s auction, weighted averages on all three maturities dipped by 30 basis points across the board to register 6.26%, 6.53% and 6.60% respectively. In money markets yesterday, overnight call money and repo rates remained steady to average 6.17% and 6.03% respectively as surplus liquidity increased to Rs. 125.06 billion. Rupee remains steady Meanwhile in Forex markets yesterday, the USD/LKR rate on one week and two week forward contracts remained steady to close the day at Rs. 133.60/70 and Rs. 133.90/95 respectively. The total USD/LKR traded volume for 20 April was at $ 83.75 million. Some of the forward dollar rates that prevailed in the market were 1 Month - 134.35; 3 Months - 135.37 and 6 Months - 136.90.