W. Avg’s on Treasury bonds increase ahead of Weekly Bill auction

By Wealth Trust Securities

The increasing trend in primary markets continued as weighted averages (W. Avg’s) on the eight-year maturity of 01.09.2023 and the 9.11-year maturity of 01.08.2025 were seen increasing by 18 and 30 basis points respectively to 9.76% and 9.97% against its previously recorded W. Avg’s at its bond auctions conducted yesterday. 

The total accepted amount dipped to Rs. 30.5 billion against its total offered amount of Rs. 40 billion as all bids received on the 4.02-year maturity of 01.11.2019 and the 14.08 year maturity of 15.05.2030 were rejected.

In secondary market bonds, yields were seen increasing during the day on the expectations and final outcome of the bond auctions. The yields on the liquid maturities of 01.06.18, 01.08.21, 01.09.23 and 01.08.25 were seen hitting intraday highs of 8.15%, 9.10%, 9.80% and 9.97% respectively and closed the day marginally lower once again on buying interest at these levels. 

This was ahead of today’s weekly bill auction, where a total amount of Rs. 18 billion will be on offer consisting of Rs. 3 billion on the 91-day, Rs. 5 billion on the 182-day and Rs. 10 billion on the 364-day maturities. 

At last week’s auction, the weighted averages increased across all three maturities to 6.36%, 6.66% and 6.72% respectively.

Meanwhile, in money markets, overnight call money and repo rates remained mostly unchanged to average 6.28% and 6.17% respectively as net surplus liquidity in the market increased to Rs. 46.42 billion yesterday. The Open Market Operations (OMO) department of the Central Bank infused liquidity for a fourth consecutive day for an amount of Rs. 3.90 billion yesterday on an overnight basis at a weighted average of 6.15%.

 Rupee dips for a third consecutive day

 The USD/LKR rate on spot contracts continued its depreciating trend for a third consecutive day as it dipped by a further 15 cents yesterday to Rs. 134.25. The total USD/LKR traded volume for 22 August 2015 was $ 22.45 million. 

Some of the forward USD/LKR rates that prevailed in the market were one month - 134.89/99; three months - 136.09/19 and six months - 137.97/07.