Secondary market bond yields dip to three week lows ahead of weekly bill auction

By Wealth Trust Securities

The downward trend in secondary market bond yields continued for a fifth consecutive day ahead of the weekly Treasury bill auction due today on the back of sustained buying interest. Activity surrounded the two 2018 maturities (i.e. 01.04.2018 and 15.11.2018), the two 2019 maturities (i.e. 01.07.2019 and 15.09.2019), the two 2021 maturities (i.e. 01.05.21 and 01.08.21) and the 01.08.25 maturity as its yields were seen hitting three week lows of 9.10%, 9.25%, 9.38% each, 9.75% each and 10.00% respectively against its previous day’s closing levels of 9.20/24, 9.30/40, 9.50/51, 9.50/55, 9.82/90, 9.85/95 and 10.20/30. In addition, yields on the 15.07.17, 01.05.20, 01.10.22, 01.09.23 and 01.09.28 were seen decreasing to levels of 8.22/25, 9.50/55, 9.82/88, 9.85/95 and 10.65/75 respectively as well.

This was ahead of today’s bill auction, at where a total amount of Rs.25 billion will be on offer consisting of Rs.5.0 billion on the 91 day, Rs.8.0 billion on the 182 day and Rs.12.0 billion on the 364 day maturities respectively. At last week’s auction, weighted averages remained steady for a second consecutive week at 6.78%, 7.07% and 7.18% respectively on the 91 day, 182 day and 364 day maturities. 

Meanwhile in money markets, Overnight call money and repo rates remained mostly unchanged to average 6.36% each  as excess liquidity stood at Rs.63.52 billion yesterday.

Rupee dips once again

The USD/LKR rate on spot contracts lost ground once gain to close the day at Rs.140.55/65 yesterday against its previous day’s closing levels of Rs.140.35/45 on the back of importer demand. The total USD/LKR traded volume for the 12th of October 2015 was US $ 66.00 million. 

Some of the forward USD/LKR rates that prevailed in the market were 1 Month - 141.20/30; 3 Months - 142.30/40 and 6 Months - 144.00/20.