Secondary market bond yields decrease ahead of weekly auction

By Wealth Trust Securities

The secondary market bond yields were seen decreasing once again yesterday despite continued foreign selling ahead of today’s weekly Treasury bills auction. 

Activity was seen surrounding the two 2021 maturities (i.e. 01.05.21 and 01.08.21) as its yields were seen decreasing to intraday lows of 12.40% and 12.45% respectively against its opening levels of 12.44/50 and 12.47/55. 

In addition, the 15.07.18 and 01.07.19 maturities were seen changing hands within the range of 11.35% to 11.40% and 11.97% to 12.00% respectively as well.

At today’s weekly Treasury bill auction, a total amount of Rs. 25.5 billion will be on offer consisting of Rs. 8.5 billion each on the 91 day, 182 day and 364 day maturities. At last week’s auction, weighted averages continued its increasing trend with the 91 day bill reflecting the highest jump of 8 basis points to 9.16% closely followed by the 364 day bill increasing by five basis points to 10.47% and the 182 day bill by two basis points to 10.07%.

In money markets, the overnight repo rate increased further yesterday to average 8.51% as the OMO department (Open Market Operations) of the Central Bank of Sri Lanka refrained from conducting any auction for a third consecutive day. The net liquidity shortfall increased to Rs. 4.58 billion. Nevertheless, the overnight call money rate decreased marginally to average 8.44%.

Rupee remains steady  

In Forex markets, the USD/LKR rate on active two weeks and one month forward contracts remained mostly unchanged for a second conservative day to close at Rs. 151.15/20 and Rs. 151.56/59 respectively as markets were at an equilibrium.  

The total USD/LKR traded volume for 13 February 2017 was $ 100.76 million. 

Some of the forward USD/LKR rates that prevailed in the market were three months - 153.55/60 and six months - 156.05/15.