Secondary market bond yields increase marginally ahead of bill auction
Wednesday, 12 November 2014 00:42
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By Wealth Trust Securities
Secondary market bond yields, consisting predominantly of the liquid maturity 1 July 2022, increased once again, with yields hitting an intraday high of 7.60% as against 7.54% which prevailed during the morning session.
However, buying interest at these levels resulted in the upward momentum being curtailed to close the day at yields between 7.60/65%. Furthermore, maturities composed of 1 January 2024 and 1 July 2019 were quoted at yields ranging from 7.75/85 % and 7.00/05%.
Securities composed of shorter maturities such as the 15 March 2015, 1 November 2015 and the close to 364 day treasury bills changed hands within the range of 5.67% to 5.70%, 5.88% to 5.93% and 5.90% to 5.95% respectively. In the meantime, a total amount of Rs. 10 b will be on offer at today’s weekly Treasury bill auction consisting of Rs. 2 b on the 182 day and Rs. 8 b on the 364 day bills. At last week’s primary auction, the weighted average yield of the 364 day bill remained stagnant at 6% for a fourth consecutive week while the 182 day bill which was on offer after a lapse of two weeks fetched a weighted average yield of 5.84%.
In money markets, overnight call money and repo rates averaged at 5.95% and 5.29% respectively as surplus liquidity stood at Rs. 8.02 b. The Open Market Operations (OMO) department of the Central Bank was seen mopping up an amount of Rs. 6 b by way of a Repo auction on a three-day basis at a weighted average of 5.78% while a further amount of Rs. 2.02 b was seen been deposited at the Standing Deposit Facility.
Rupee on spot next contracts continues to remain steady
The dollar/rupee (USD/LKR) rate on spot next contracts closed steady for a second consecutive day at Rs. 131.00/05 as spot contracts continued to be inactive. The total USD/LKR traded volume for 10 November was at $ 64.60 million. Some of the forward dollar rates that prevailed in the market were: one month – 131.60; three months – 132.53; and six months – 133.65.
