Secondary market bond yields decrease ahead of Treasury bill auction

Tuesday, 23 December 2014 02:05 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities Buying interest in liquid maturities saw overall yields decrease across the yield curve. The 1 July 2019, 1 July 2022 and 1 January 2024 which opened the day at levels of 7.23/28, 7.95/05 and 8.05/20 respectively, were seen decreasing to intraday lows of 7.15%, 7.70% and 7.78% with increased volumes changing hands. In line with this, the 2018 maturities too (i.e. 1 April 2018 and 15 August 2018) decreased to lows of 7.05% and 7.13% followed by the 1 May 2021 which traded at 7.55%. However, considerable selling interest at these levels resulted in yields increasing once again to close the day marginally higher.

Today’s treasury bill primary auction will have on offer a total amount of Rs. 12 billion, consisting of Rs. 2 b on the 91 day, Rs. 3 b on the 182 day and Rs. 7 billion on the 364 day maturities. The 91 day maturity will be on offer at the auctions after a lapse of nine weeks. At last week’s auction, the weighted average (WAvg) on the 364 day bill increased after a period of 10 weeks by one basis point to 5.99%, while the WAvg on the 182 day bill remained unchanged at 5.83%. In secondary bill markets, May 2014 bills were quoted at levels of 5.75% to 5.80% and the November bills within a range of 5.90% to 5.95%. Surplus liquidity in money markets stood at Rs. 30.91 b, as overnight call money and repo rates remained steady to average 6.00% and 5.49% respectively. The Open Market Operations (OMO) Department of the Central Bank was seen mopping up an amount of Rs. 18.95 b by way of a four-day term Repo auction at a WAvg of 6.01% while a further Rs. 11.96 b was seen being deposited at the Standing Deposit Facility Rate (SDFR). Rupee remains steady In Forex markets yesterday, the USD/LKR on spot next contracts continued to remain steady to close at Rs. 131.98/00. The total USD/LKR traded volume for 19 December was $ 51.10 million. Some of the forward dollar rates that prevailed in the market were one month – 132.30; three months – 133.45; and six months – 134.60.