Secondary market yields broadly steady ahead of Treasury bond auctions

By Wealth Trust Securities

Activity in secondary market bonds was seen declining yesterday with yields closing the day broadly steady against its previous trading day’s closings due to most market participant adopting a ‘wait and see’ policy ahead of today’s Treasury bond auctions. 

The auction will have Rs. 10 billion in total on offer, consisting of Rs. 2 billion each on a 4.08-year maturity of 01.05.20 and an 8.00-year maturity of 01.09.23 and Rs. 3 billion each on a 10.09-year maturity of 01.06.26 and a 14.08-year maturity of 15.05.30.

A limited amount of activity was witnessed on the maturities of 01.07.19 and 01.05.20 within the range of 9.24% to 9.25% and 9.50% to 9.55% respectively while on the short end of the yield curve, durations of one-and-a-half year bonds to two-year bonds (2017 maturities) were seen changing hands within the range of 7.93% to 8.30%. 

Meanwhile, in secondary bill markets, durations centering one to two months were traded within the range of 6.70% to 6.80%. 

Meanwhile, in money markets, the overnight repo rate decreased marginally to average 6.44% as surplus liquidity in markets increased further to Rs. 61.82 yesterday. Overnight call money averaged at 6.35%.

Rupee dips marginally

Meanwhile, in Forex markets yesterday, the USD/LKR rate on spot contracts was seen closing the day marginally lower at Rs. 137.75/90 against its previous closing of Rs. 137.50/75 subsequent to gaining an intraday high of Rs. 137.20. The total USD/LKR traded volume for 4 September 2015 was $ 20.50 million. 

Some of the forward USD/LKR rates that prevailed in the market were three months - 139.42/55 and six months - 141.20/35.