Treasury bonds auctions reflect mix fortunes

By Wealth Trust Securities

The weighted averages at yesterday’s Treasury bond auctions reflected mixed fortunes with the weighted average (W. Avg) on the 4.07-year maturity of 01.05.2020 reflecting a drop of 07 basis points (bp) to 9.58% against its previously recorded W.Avg on 8 September while the 9.10-year maturity of 01.08.2025 reflected an increase of 41 bp to 10.38% against its previously recorded W. Avg on 25 August 2015. 

In addition, the seven-year maturity of 01.10.2022 and the 12.11-year maturity of 01.09.2028 recorded W. Avg’s of 9.95% and 10.88% respectively as the total accepted amount exceeded the total offered amount of Rs. 16 billion by Rs. 12.70 billion. 

Following the auction, selling interest on the liquid maturities of 01.05.20, 01.08.21, 01.10.22, 01.09.23 and 01.08.25 saw its yields increase to highs of 9.55%, 9.75%, 10.05%, 10.00% and 10.35% respectively against its day’s opening lows of 9.47%, 9.65%, 9.90%, 9.92% and 10.26%. 

This was ahead of today’s weekly Treasury bill auction, where a total amount of Rs. 24 billion will be on offer, consisting of Rs. 6.0 billion on the 91-day bill, Rs. 8 billion on the 182-day bill and Rs. 10.0 billion on the 364-day bill. At last week’s bill auction, all bids were rejected.

Meanwhile, in money markets yesterday, overnight call money and repo rates averaged at 6.35% and 6.41% respectively as surplus liquidity increased marginally to Rs. 86.69 billion.

Rupee continues to hit new lows

The continued importer demand saw the USD/LKR rate on spot contracts hit a new low of Rs. 140.25 yesterday subsequent to opening at levels of Rs. 139.70/90. The total USD/LKR traded volume for 14 September 2015 was US $ 60.25 million. 

Some of the forward USD/LKR rates that prevailed in the market were one month - 140.75/80; three months - 141.90/00 and six months - 143.45/65.