W.Avg on 364-day bill dips further; YoY dip now at 340 basis points

Wednesday, 25 December 2013 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities The weighted averages continued to tumble for the 14th consecutive week at the weekly Treasury bill auction held yesterday. The 182-day bill dipped the most by a staggering 34 basis points to 7.85% while the 91-day and 364-day bills dipped by 19 basis points and 24 basis points respectively to 7.54% and 8.29%.

Interestingly, this drop reflects a reduction of 246 basis points, 347 basis points and 340 basis points each respectively of the 91-day, 182-day and 364-day maturities between end December 2012 and end December 2013 (YOY). The amount accepted of the 364-day maturity was Rs. 19 billion against an offered amount of Rs. 14 billion, indicating continued market appetite for this maturity where an additional amount of Rs. 5 billion was accepted. Subsequent to the release of the weekly Treasury bill auction results, the secondary bond market yields which were on a decreasing trend reversed as a result of considerable selling pressure due to profit taking. The two liquid five-year maturities (i.e. 01.04.2018 & 15.08.18) saw their yields hit an intraday low of 9.47% and 9.52% respectively before closing the day at intraday highs of 9.62/68 and 9.70/75. In secondary bill market the 364-day bill was seen changing hands at levels of 8.20% to 8.25% prior to the auction and 8.05% to 8.15% subsequent to the auction. The overnight call money and repo rates remained steady to average 7.74% and 7.02% respectively as the surplus liquidity stood at Rs. 25.88 billion.

The Open Market Operations (OMO) department of the Central Bank was seen mopping up an amount of Rs. 5.93 billion on a three-day basis at a WAvg of 7.14% while a further Rs. 19.95 billion was deposited at its window rate of 6.50%. Rupee closes stable In USD/LKR markets, the rupee was seen dipping to an intraday low of Rs. 130.77 before closing the day mostly unchanged at Rs. 130.70/75. The total USD/LKR volume for the previous day (23 December 2013) stood at $ 48.35 million. Some of the forward dollar rates that prevailed in the market were 1-Month: Rs. 131.13, 3-Months: Rs. 131.98 and 6-Months: Rs. 133.53.