Treasury bill weighted averages dip for a second consecutive week

Thursday, 22 August 2013 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities Weighted averages (WAvg) decreased for a second consecutive week at its weekly Treasury bill auction held yesterday. The 182-day and 364-day bills reflected a dip of 01 basis point (bp) each to 9.65% and 10.55% respectively, while all bids for the 91-day bill were rejected. However, the Central Bank’s total requirement of Rs. 6.5 billion plus an additional Rs. 2.4 billion was met by accepting more on the 364-day maturity, as it continued to dominate the auction by representing 91% of the total accepted amount of Rs. 8.93 billion.

Following the release of the weekly auction results, the increasing trend in secondary market bond yields witnessed during morning hours of trade came to a halt subsequent to the liquid two five year maturities (i.e. 1 April 2018 and 15 August 2018) hitting a near two-month high of 11.49% and 11.50% to close the day at levels of 11.46/49 and 11.47/52 respectively against its previous day’s closing of 11.35/38 and 11.40/44. In addition, a limited amount of activity was witnessed on the eight year maturity at levels of 11.60% while the three and a half year maturity was seen closing the day at levels of 11.43/47 as well. However demand for the 364-day bill in secondary markets saw it close the day at levels of 11.50/53 while March 2014 maturities were seen quoted at levels of 9.90% to 10.00%. Surplus liquidity in money markets increased marginally to Rs. 6.13 billion yesterday as overnight call money and repo rates remained mostly unchanged to average 8.70% and 8.16% respectively. The Open Market Operations (OMO) department of Central Bank was seen mopping up an amount of Rs. 2 billion on an overnight basis by way of a repo auction at a WAvg of 7.40% while a further Rs. 0.20 billion was mopped up for a period seven days at a WAvg of 7.92% as well. An amount of Rs. 3.93 billion was seen been deposited at its repo window rate of 7.00% as well. Spot next contracts dip below Rs. 132 level In forex markets, the USD/LKR rate on spot next contracts dipped by 15 cents yesterday to hit a daily low of Rs. 132.15 and close the day at Rs. 131.08/15 against its previous day’s closing level of Rs. 131.95/00. However trades on spot contacts continued to be inactive while tom value contracts were seen closing the day at levels of Rs. 131.90-00 as well. The total USD/LKR traded volume for the previous day (19 August 2013) stood at $ 26.30 million. Some of the forward dollar rates that prevailed in the market were 1-Month: Rs. 132.63, 3-Months: Rs. 134.25 and 6-Months: Rs. 136.65.