Secondary market bond yields edge up marginally ahead of weekly auction

By Wealth Trust Securities

The yields in secondary bond markets were seen increasing yesterday, reversing a declining trend witnessed over the past four trading days ahead of today’s weekly Treasury bill auction. 

At today’s auction, the total amount offered was increased to Rs. 24 billion in comparison to its previous week’s total of Rs.20 billion, consisting of Rs. 9 billion each on the 182-day and 364-day maturities and Rs. 6 billion on the 91-day maturity. 

At last week’s auction, the weighted averages on all three maturities continued its increasing trend for a third consecutive week to reflect increases of eight, five and three basis points respectively to 6.22%, 6.31% and 6.31%.

In secondary bond markets, selling interest on the liquid maturities of 01.05.2021, 01.08.2021, 01.10.2021, 01.07.2022, 01.10.2022 and 01.09.2023 saw its yields increase to intraday highs of 8.65% each, 8.90%, 9.10%, 9.18% and 9.32% respectively against its day’s opening lows of 8.60% each, 8.80%, 9.05%, 9.12% and 9.25%. 

In addition, a limited amount of activity was witnessed on the two 2018 maturities (i.e. 01.04.2018 and 01.06.2018) within the range of 7.72% to 7.78% and 7.80% to 7.85% respectively. Meanwhile, in secondary bill markets, the September and October 2015 bills were seen quoted at levels of 6.05/10 and 6.15/25 respectively. 

Meanwhile, in money markets, surplus liquidity remained high at Rs. 92.5 billion yesterday as overnight call money and repo rates remained mostly unchanged to average 6.13% and 5.83% respectively.

Rupee appreciates

 In Forex markets, the USD/LKR rate on spot contracts appreciated for the first time in seven trading days yesterday to Rs. 133.70 against its previous level of Rs. 133.80. The total USD/LKR traded volume for the previous day (20-07-15) stood at $ 65.25 million. 

Some of the forward dollar rates that prevailed in the market were one month - 134.30/40; three months - 135.35/50 and six months - 136.90/10.