Secondary market bond yields dip for a second consecutive day
Thursday, 26 September 2013 00:39
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By Wealth Trust Securities
Secondary market bond yields dipped for a second consecutive day as activity remained very high yesterday, mainly on the liquid two five year maturities (i.e. 1 April 2018 and 15 August 2018) as it was seen hitting intraday lows of 11.73% and 11.78% respectively during morning hours of trading against its opening levels of 11.80% and 11.82%.
However, subsequent to the release of the weekly Treasury bill auction results, yields increased once again marginally to close the day at levels of 11.75/77 and 11.78/80. In addition the two year maturity was seen changing hands within the range of 11.03% to 11.06% and closed the day at 11.00/06.
At the weekly auction, weighted averages (Wavg) dipped by one basis point each on the 91 day and 182 day maturities while the much sort after 364 day WAvg remained unchanged at 10.57% against market expectations of a drop. An additional amount of Rs. 5.8 b was accepted on the 364 day bill against its initial offered amount of Rs. 8 b, reflecting markets renewed interest on this maturity as the total accepted amount exceeded the total offered amount for the first time in four weeks as well.
However in secondary bill markets, demand for shorter tenure maturities continued to be high as January 2014 bills were seen changing hands within the range of 8.90% to 9.10%, April 2014 within the range of 9.90% to 10.00%, June 2014 within 10.30% to 10.35% and August 2014 within 10.40% to 10.45% while the 364 day bill closed the day at 10.54/58.
Meanwhile in money markets, an amount of Rs. 28.79 billion was deposited at CBSL’s Repo window of 7.00% once again as Central bank refrained from conducting overnight auctions under its Open Market Operations (OMO) for a third consecutive day. However OMO was seen mopping up liquidity on a term basis for an amount of Rs. 20.31 b for a period of seven days by way of a Repo auction at a Wavg of 7.88% from the total surplus of Rs. 49.10 billion. Furthermore it carried out two auctions for outright sales of Treasury bills as well, totaling Rs. 8 b yesterday for durations of 57 days and 64 days. However, only an amount of Rs. 3 b in total was drained out through this method at WAvgs of 8.45% and 8.50% respectively, value dated today.
Rupee appreciates to a
one month high
The USD/LKR rate appreciated below Rs. 132.00 yesterday for the first time in one month to close the day at Rs. 131.95/98 on the back of selling interest by banks. The total USD/LKR traded volume for the previous day (24 September 2013) stood at US$ 15.35 million.
