Secondary market bond yields subdued following weekly auction outcome
Thursday, 29 May 2014 00:00
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By Wealth Trust Securities
Secondary market bond yields closed the day mostly unchanged amidst considerable volumes changing hands yesterday as weighted averages (WAvgs) at the weekly Treasury bill auction remained steady.
The WAvg on the 364 day bill remained stagnant at 7.02% for a sixth consecutive week as it represented 76% of the total accepted amount of Rs. 18.58 billion while the WAvg on the 182 day bill remained steady for a second consecutive week at 6.75%. However the WAvg on the 91 day bill reflected a dip of 01 basis point to 6.56%.
Activity in secondary bond markets continued to surround the liquid two 2018 maturities (i.e. 1 April 2018 and 15 August 2018) and the 1 July 2019 maturity as considerable volumes were seen changing hands within a thin range of 8.44% to 8.47%, 8.53% to 8.55% and 8.94% to 8.96% respectively.
In addition, considerable volumes were seen changing hands on the 2017 maturities as well within the range of 7.95% to 8.03% and 2022 maturities within the range of 9.95% to 9.97% while in secondary bill markets, August 2014 durations were seen changing hands within the range of 6.57% to 6.62%, October within 6.63% to 6.65%, December within 6.75% to 6.78%, February within 6.84% to 6.87% and May within 6.96% to 6.99% pre and post auction.
Meanwhile in money markets, the total surplus of Rs. 6.92 billion was deposited at CBSL’s Standing Deposit Facility Rate (SDFR) of 6.50% as Central Bank refrained from conducting any auctions under its Open Market Operations (OMO) yesterday. This in turn kept overnight call money and repo rates steady to average 6.94% and 6.52% respectively.
Rupee dips further
The rupee was seen dipping further yesterday to close the day at Rs. 130.43/47 on the back of import led demand. The total USD/LKR traded volume for the previous day (27 May) stood at $ 78.45 million.
Given are some forward dollar rates that prevailed in the market: one month – 130.93; three months – 131.80; and six months – 133.15.
