Thursday, 19 December 2013 00:53
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By Wealth Trust Securities
Weighted averages (WAvg’s) tumbled for a thirteenth consecutive week at its weekly Treasury bill auction held yesterday. The 364-day bill dipped the most by a stunning 62 basis points (bp) to 8.53%, a level last seen in November 2011.
Interestingly this change of 62 basis points reflects the highest week-on-week change within the last 12 months which incidentally covers three policy rate cuts and a Statutory Reserve Requirement (SRR) cut.
An amount of Rs. 13.3 billion was accepted on the 364-day maturity against its initial offered amount of Rs. 10 billion, signalling continued market demand for this duration as it represented 81.6% of the total accepted amount.
In addition, the 91-day and 182-day bills reflected drops of 12 bp and 29 bp respectively to record WAvg’s of 7.73% and 8.19%.
Activity in secondary bond markets continued to remain very high yesterday as yields closed the day lower against its previous day’s closings, driven by expectations and the final outcome of the Treasury bill auction.
Activity once again centered on the liquid two 2018 maturities (i.e. 01.04.2018 and 15.08.2018) as it was seen hitting intraday lows of 9.66% and 9.70% respectively against its days opening highs of 9.88% and 9.92%.
In addition, a limited amount of activity was witnessed on the 2015 maturities within range of 8.55% to 8.80% while in secondary bill markets, June 2014 maturities were seen changing hands within the range of 7.90% to 8.00% and the latest 364-day bill within 8.25% to 8.30% subsequent to the release of the auction results.
Meanwhile in money markets, the Open Market Operations (OMO) department of the Central Bank was seen mopping up an amount of Rs. 5.5 billion on a two-day basis at a WAvg of 7.00% while a further Rs. 8.78 billion was deposited at its window rate of 6.50% as surplus liquidity increased to Rs. 14.28 billion yesterday.
Overnight call money and Repo rates remained steady to average 7.74% and 7.02% respectively.
