Secondary market Bond yields dip marginally ahead of Bill auction

Wednesday, 25 March 2015 00:45 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities Activity in secondary Bond markets was seen increasing yesterday as buying interest on the belly end of the yield curve saw yields dip yesterday ahead of today’s weekly Treasury Bill auction. Buying interest on the two-year maturity of 15 May 2017, t

he two 2018 maturities (i.e. 1 April 2018 and 1 June 2018) and the four-year maturity of 15 September 2019 saw its yields dip to intraday lows of 7.85%, 8.30%, 8.55% and 8.78% respectively against its previous day’s closing levels of 7.90/20, 8.30/40, 8.57/67 and 8.85/90. In addition, yields on the seven year maturity of 1 July 2022 was seen dipping to 8.90/95 while yields on the eight-year maturity of 1 September 2023 was seen increasing to an intraday high of 9.70%. At today’s weekly auction, a total amount of Rs. 16 billion will be on offer consisting of Rs. 4 b on the 91 day, Rs. 5 b on the 182 day and Rs. 7 b on the 364 day maturities. At last week’s auction, weighted averages plunged below 7.00% once again to record 6.79%, 6.87% and 6.97% respectively on the 91 day, 182 day and 364 day maturities. In money markets, overnight call money and repo rates decreased further to average 6.67% and 6.71% respectively as surplus liquidity remained high at Rs. 97.02 b yesterday. Rupee remains mostly unchanged The rupee on the two week forward contract was seen trading within the range of Rs. 133.80 to Rs. 133.82 yesterday to close the day levels of Rs. 133.75/80 in comparison to its previous day’s closing levels of Rs. 133.80/85. The total USD/LKR traded volume for 23 March was at $ 31.25 million. Some of the forward USD/LKR rates that prevailed in the market were: one month – 134.25; three months – 135.40; and six months – 137.20.

Rupee forwards firmer on inward remittances

Reuters: Rupee forwards ended firmer on Tuesday due to dollar inflows from remittances, but trading was thin as the market awaited cues on the direction of interest rates, dealers said. Actively traded two-week rupee forwards ended at 133.75/85 per dollar, compared to Monday’s close of 133.87/95. “There were banks selling due to remittances. The remittances are picking up slowly,” said a currency dealer on condition of anonymity. The Central Bank, however, prevented a fall in the spot rupee and one-week forwards at 132.90/133.20 and 133.60/75, respectively, within the limits set by it. Central Bank officials were not available for comment. Dealers said the market was awaiting cues on the direction of interest rates after yields on T-Bills fell between 31 and 44 basis points at a weekly auction on Wednesday, after having spiked by 112-124 basis points in two previous weekly auctions. They said a probe into all Bond auctions since 2012 is also hurting sentiment. Sri Lanka has launched a probe into allegations of corruption in Government Bond sales held by the Central Bank since 2012 after Opposition parties called for an independent investigation into a February Bond auction.