Secondary market bond yields dip ahead of bond auctions

By Wealth Trust Securities

The yields in secondary bond markets were seen dipping yesterday on thin trade ahead of two Treasury bond auctions due today.

Buying interest across the board saw yields on the liquid maturities of 15.05.2017, 01.06.2018, 15.09.2019, 01.06.2020, 01.08.2021, 01.07.2022, 01.09.2023 and 15.03.2025 dip to intraday lows of 6.80%, 7.64%, 8.03%, 8.25%, 8.40%, 8.50%, 8.68% and 8.97% respectively against its day’s opening of 6.90/00, 7.70/73, 8.07/09, 8.28/32, 8.42/45, 8.53/58, 8.70/73 and 8.98/00.

Today’s bond auction will see a total of Rs. 4 billion on offer consisting of Rs. 2 billion each on a 7.04 year maturity of 01.10.2022 and a 9.10 year maturity of 15.03.2025.

The weighted average fetched for these two maturities previously was 7.15% and 8.98% respectively. Continued buying interest in secondary market bills saw July and November 2015 durations change hands within the range of 5.80% to 5.90% and 6.08% to 6.15% respectively.

Meanwhile, in money markets, surplus liquidity remained high at Rs. 126.44 billion yesterday as overnight call money and repo rates decreased further to average 6.12% and 5.82% respectively.

Rupee closes steady

The rupee on one-month and two-month forward contracts was seen closing the day mostly unchanged at levels of Rs. 134.45/55 and Rs. 135.30/50 respectively. The total USD/LKR traded volume for the previous day (15-05-15) stood at $ 77.35 million. Some of the forward dollar rates that prevailed in the market were 3 months - 136.00/30 and 6 months - 137.60/70.