Secondary market yields stabilize as weighted averages remain flat

By Wealth Trust Securities

The weighted averages (WAvg) at yesterday’s Treasury bill auction remained unchanged on the 182-day and 364-day maturities while the WAvg on the 91-day dipped by two basis points.

Once again the accepted amount on the 364-day bill was Rs. 6.3 billion greater than its initial offered amount of Rs. 11 billion, representing 73% of the total accepted amount of Rs. 23.6 billion against its initial total offered amount of Rs. 15 billion. In secondary bond markets, yields closed the day marginally lower yesterday mainly on the liquid two five-year maturities (i.e. 01 April 2018 and 15 August 2018) subsequent to it fluctuating within a band of 11.06% to 11.12% and 11.13% to 11.17% respectively. Any upward momentum in yields was negated due to the fact that the 364-day bill weighted averages remained unchanged. However yield on the eight-year maturity increased marginally to levels of 11.62/68 while the 364-day bill was seen been quoted at 10.85/88 subsequent to the auction.

Meanwhile the Public Debt Department (PDD) of Central Bank announced it would conduct a 30-year bond auction for the first time in its history to be held today for an amount of Rs. 2 billion.

The Central Bank continued to refrain from conducting any Open Market Operation (OMO) auctions yesterday as surplus liquidity in money markets increased to Rs. 7.88 billion.

This in turn helped overnight call money and repo rates remain steady to average 9.00% and 8.38% respectively.

Rupee remained steady

In Forex markets the USD/LKR rate remained mostly unchanged to close the day at Rs. 126.46-48. The total USD/LKR volume for the previous day stood at US$ 101.4 million.