Secondary market subdued ahead of weekly bill auction

 By Wealth Trust Securities

Activity in secondary bond markets dried up yesterday as yields remained steady during the day with active two way quotes been seen only on the two five year (i.e. 15 August 2018 and 1 April 2018) maturities at levels of 10.78%-10.82% and 10.81%-10.85% respectively.

However activity on secondary market bills was witnessed yesterday, mainly surrounding the 364 day bill as considerable volumes were seen changing hands at levels of 11% to 11.02% ahead of today’s weekly auction where an amount of Rs. 20 billion in total is on offer at the auction, with Rs. 1 billion and Rs. 2 billion on offer for the 91 day and 182 day bills respectively while an amount of Rs. 17 billion on offer for the 364 day bill. At last week’s auction, weighted averages dipped across the board for an eighth consecutive week.

Liquidity above Rs. 50 billion for the first time in six months

Meanwhile in money markets, overnight call money and repo rates remained steady to average 9.61% and 8.84% respectively as a substantial amount of Rs .49.2 billion was mopped up from the system on an overnight basis by way of a repo auction at a weighted average of 8.36%. This led to surplus liquidity increasing to Rs. 52.08 billion, for the first time in six months.

Rupee steady at Rs. 126.40

The dollar-rupee rate closed the day steady at Rs. 126.38 yesterday subsequent to dipping during intraday trading to Rs. 126.50. The total USD/LKR traded volume for the previous day (1 January 2013) stood at US$ 135.685 million. Given are some forward dollar rates that prevailed in the market; one month – 127.26; three months – 129.05; and six months –131.88.