Secondary market Treasury yields remain steady despite primary market yield increases

By Wealth Trust Securities

Secondary market bond yields closed the day mostly unchanged with the two liquid five-year maturities (1 April 2018 and 15 August 2018) quoted between 11.38/42%. The intraday day high of 11.48% was only seen very briefly just after the announcement of the auction results.

The weighted average for the five-year bond at yesterday’s primary auction was 11.45% reflecting an increase of 48 basis points against a similar maturity, auctioned on 26 February, and the weighted average of the 10-year maturity was 11.80% reflecting only an increase of four basis points. Furthermore the 12-year maturity which was auctioned for the first time during the year recorded a weighted average of 12.15%. The secondary bill market, witnessed selling pressure across all three maturities at yields above the respective weighted averages.

Liquidity increases once again

The surplus liquidity in the money market increased once again to Rs. 29.16 b with the Central Bank draining an amount of Rs. 25.82 b through its open market operations at a WAvg of 8.35%. This intern helped the overnight call money and repo rates to remain steady at 9.49% and 8.58% respectively.

Rupee remained stable

The rupee lost ground marginally in early hours of trading yesterday to a low of Rs. 126.93 before it bounced back to close the day at Rs. 126.88. The total USD/LKR traded volume for the previous day (25 March 2013) stood at US$ 58.91 million. Given are some forward dollar rates that prevailed in the market: one month – 128.03; three months – 130.13; six months – 133.08.