Seller’s market sees bond prices rise further ahead of weekly auction
Wednesday, 2 July 2014 00:00
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By Wealth Trust Securities
Yields in secondary bond markets continued its descending trend (increase in prices) yesterday as well, with considerable buying interest witnessed on the five-year duration of 1 July 2019 to hit a 35-month low of 8.38%, the seven-year of 1 May 2021 to hit a 30-month low of 9.00% and the eight-year of 1 July 2022 to hit a 31-month low of 9.40% respectively in comparison to its previous day’s closing levels of 8.50/52, 9.12/14 and 9.55/58.
In addition, average volumes were seen changing hands on the two 2018 maturities (i.e. 1 April 2018 and 15 August 2018) within the range of 7.99%-8.05% and 8.06%-8.10% respectively.
At today’s auction, a total amount of Rs. 10 billion will be on offer which will consist of Rs. 1 b each on the 91-day and 182-day maturities and Rs. 8 billion on the 364-day maturity. At last week’s auction, the weighted average on the 364-day bill declined by one basis point to break the psychological level of 7.00% while the weighted averages on the 91-day and 182-day bills declined by two basis points each to 6.51% and 6.69% respectively.
In secondary bill markets, December 2014 bills were seen been quoted at levels of 6.69% to 6.72% while February 2015 bills were seen changing hands at levels of 6.77% to 6.80%.
Meanwhile, in money markets yesterday, overnight call money and repo rates remained steady to average 6.97% and 6.55% respectively as Central Bank continued to refrain from conducting any auctions under its Open Market Operations (OMO). The total surplus of Rs. 6.24 billion was deposited at CBSL’s Standing Deposit Facility Rate (SDFR) of 6.50%.
Rupee appreciates marginally
Meanwhile in Forex markets, the USD/LKR rate appreciated marginally yesterday to close the day at Rs. 130.30/32 on the back of export conversions outweighing importer demand. The total USD/LKR traded volumes for 30 June stood at $ 55.00 million.
Some of the forward dollar rates that prevailed in the market were one month – 130.72; three months -131.56; and six months – 132.71.
