Upward momentum persists at Primary bond auctions ahead of Primary bills auction

Wednesday, 11 March 2015 00:08 - - {{hitsCtrl.values.hits}}

Rs. 51.8 billion accepted against Rs. 30 billion offer
A further Rs. 40 billion on offer through primary market auctions

By Wealth Trust Securities A continued buyers’ market saw the upward momentum in primary market rates continue at yesterday’s bond auctions as the overall yield curve sustained its upward trend. A total amount of Rs. 51.8 billion was accepted on all three maturities against its initial total offered amount of Rs. 30 billion. The weighted average on the market favourite seven-year maturity of 01.07.2022 was recorded at 9.17% while the two new issues of the 10-year and 20-year maturities of 15.03.2025 and 15.03.2035 recorded weighted averages of 10.09% and 11.20% respectively. Meanwhile, in secondary bond markets, activity continued to surround the liquid auction maturity of 01.07.2022 from an intraday low of 8.50% pre-auction to a high of 9.40% post auction. In addition, a limited amount of activity was witnessed on the two-year maturity of 15.05.2017 within the range of 7.70% to 7.80% and on the two three-year maturities (01.04.2018 & 15.08.2018) within the range of 8.00% to 8.15%. This was ahead of today’s bill auction, at where a total amount of Rs. 20 billion will be on offer consisting of Rs. 6 billion each on the 91 day and 182 day maturities and a further Rs. 8 billion on the 364 day maturity. At last week’s auction, weighted averages were seen increasing close to one year highs to record levels of 6.89%, 6.98% and 6.99% respectively on the 91 day, 182 day and 364 day maturities. In addition, to complete a week filled with primary offers leading to the Rs 79.3 billion bond maturity due on 15 March, the Public Debt Department (PDD) of the Central Bank announced its plans to conduct its second bond auction for the week, at where Rs. 10 billion each will be on offer on Thursday for durations of 3.02 years and 8.05 years respectively. Meanwhile in money markets yesterday, overnight call money and repo rates averaged at 6.70% and 6.48% respectively as surplus liquidity remained high at Rs. 68.92 billion. Rupee dips marginally The USD/LKR rate on spot next-next and one week forward contracts were seen dipping marginally yesterday to close the day at 133.56/60 and 133.60/62 while spot contracts remained stagnant at levels of Rs. 132.90/30. The total USD/LKR traded volume for 9 March 2015 was at $ 63.70 million. Some of the forward USD/LKR rates that prevailed in the market were 1 Month - 134.20; 3 Months -135.25 and 6 Months - 137.10.