Upward momentum persists ahead of weekly bill auction

By Wealth Trust Securities

The upward trend in secondary market bond yields continued yesterday as well, with the liquid maturities of 15.10.21, 01.01.24 and 01.06.26 hitting intraday highs of 12.20%, 12.52%, and 12.65% respectively in morning hours of trading. 

However buying interest at these levels curtailed any further upward movement as yields dipped once gain to its opening lows of 12.15%, 12.50% and 12.60%. Nevertheless the 2018 maturities consisting of the 15.08.18, 15.10.18 and 15.11.18 were seen dipping throughout the day to hit lows of 11.45% against its opening highs of 11.65% 

Meanwhile inflation for the month of May was seen increasing to a 25-month high of 4.80% on its point to point while its annualized average increased to an 11-month high of 1.70%.

At today’s weekly bill auction, a total amount of Rs.31 billion will be on offer consisting of Rs.12 billion on the 91 day, Rs.10 billion on the 182 day and Rs.9 billion on the 364 day maturities. At last week’s auction, weighted averages increased on the 91 day and 182 day maturities by 6 and 27 basis points respectively to 8.71% and 9.67% while all bids received for 364 day maturity were rejected.

Meanwhile in money markets, overnight call money and repo rates averaged at 8.15% and 7.97% respectively as the net surplus liquidity in the system increased to Rs.25.86 billion yesterday.

Rupee appreciates marginally

 The rupee rate on its spot next contract and its one week forward contract was seen appreciating marginally yesterday to close the day at Rs.148.00/20 and Rs.148.20/40 respectively against its previous day’s closing levels of Rs.148.10/50 and Rs.148.25/50. The total USD/LKR traded volume for 30 May was $ 39.50 million. 

Some of the forward USD/LKR rates that prevailed in the market were: one month – 148.90/10; three months – 150.45/65; and six months – 152.70/00.