Secondary market bond yields edged up marginally as inflation increases

Friday, 2 May 2014 00:12 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

Inflation on a point to point basis for the month of April reflected an increase for the first time in five months to 4.9% in comparison to its previous month’s figure of 4.2%. However, the annualised average continued its decreasing trend to register 5.6% against its previous month’s figure of 5.7%. In line with the increase on the point to point number, secondary market Treasury bond yields increased marginally to close the day at 8.73/78, 8.83/88 and 9.08/12 on the liquid two 2018 maturities (i.e. 1 April 2018 and 15 August 2018) and the 1 July 2019 maturity respectively. In addition, two-way quotes on the 2017 maturities were seen increasing to levels of 8.20% to 8.25% followed by the 1 November 2015 maturity to 7.30% to 7.35%. Meanwhile in money markets, the Open Market Operations (OMO) department of Central Bank successfully drained out in total an amount of Rs. 49.30 billion by way of three term Repo auctions yesterday, for 28 days at a weighted average (WAvg) of 6.70%, 56 days at 6.75% and 77 days at 6.78% respectively, valued for Friday 2 May. In addition, a further amount of Rs. 4.83 b was mopped up on an overnight basis by way of a Repo auction at a WAvg of 6.53% as well. Overnight call money and Repo rates averaged at 6.94% and 6.50% respectively as surplus liquidity increased to Rs. 15.55 b.

Rupee loses ground marginally In Forex markets, the rupee lost grounds marginally yesterday to close the day at levels of 130.62/65 on the back of importer demand. The total USD/LKR traded volume for the previous day (29 April) stood at $ 83.20 million. Some of the forward dollar rates that prevailed in the market were: one month – 131.16; three months – 132.24; and six months – 133.79.