Secondary market bond yields up ahead of T bill auction
Wednesday, 6 August 2014 01:25
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By Wealth Trust Securities
Selling interest on the liquid maturities saw overall yields increase across the yield curve in secondary bond markets yesterday. The liquid maturities of 1 July 2019, 1 July 2022 and 1 January 2024 which opened the day at levels of 7.05/10, 7.98/02 and 8.15/20 respectively, were seen increasing to intraday highs of 7.20%, 8.06% and 8.25% on the back of moderate volumes changing hands. In line with this, yields on the two 2018 maturities (i.e. 1 April 2018 and 15 August 2018), the 15 September 2019 and the two 2029 maturities (i.e. 1 January 2029 and 1 May 2029) were seen increasing as well to highs of 7.10%, 7.17%, 7.29% and 9.33% each respectively followed by the shorter maturity of 15 May 2017 to 6.85%. However, considerable buying interest at these levels saw yields dip once again to close the day mostly unchanged against its previous day’s closing levels ahead of today’s weekly Treasury bill auction.
At today’s auction, a total amount of Rs. 12 billion will be on offer in comparison to its previous weeks total offered amount of Rs. 15 billion, which will consist of Rs. 1 billion on the 91-day, Rs. 2 billion on the 182-day and Rs. 9 billion on the 364-day maturities.
At last week’s auction, weighted averages dipped by 07 basis points each on the 91-day and 182-day maturities to 6.36% and 6.47% respectively, while the 364-day dipped by 10 basis points to 6.58%.
In secondary bill markets, February 2014 bills were quoted at levels of 6.35% to 6.40%, June 2014 within 6.40% to 6.45% and the 364-day bill within 6.45% to 6.50%.
Meanwhile in money markets, surplus liquidity remained healthy at Rs. 16.94 billion as the Central Bank refrained from conducting any Open market Operations (OMO) yesterday. The full amount was deposited at Central Bank’s Standing Deposit Facility Rate (SDFR) of 6.50%. Overnight call money and repo rates remained steady to average 6.64% and 6.53% respectively.
Rupee remains steady for a seventh consecutive day
In Forex markets yesterday, the USD/LKR rate continued to remain steady to trade within a narrow band of Rs. 130.21 to Rs. 130.22 as markets were at equilibrium. The total USD/LKR traded volumes for 4 August stood at $ 33.05 million.
Some of the forward dollar rates that prevailed in the market were one month: Rs. 130.50, three months: Rs. 131.07, and six months: Rs. 132.07.
