Weekly averages continue downward trend

By Wealth Trust Securities

The weighted averages (WAvg) on both the 91 day and 182 day bills continued their downward trend to reflect dips of three basis points (bp) and one bp respectively to 8.67% and 9.80%, while the WAvg on the 364 day bill remained unchanged at 10.85% at yesterday’s weekly Treasury bill auction.

The 364 day maturity continued to dominate the auction as it represented 75% of the total accepted amount of Rs. 14.9 b, which was Rs. 2.9 b higher than the initialed total offered amount of Rs. 12 b.

In secondary bond markets, yields increased marginally yesterday, mainly on the liquid two five year maturities (i.e. 1 April 2018 and 15 August 2018) to intraday highs of 11.14% and 11.17% respectively before dipping once again to close the day mostly unchanged in comparison to its previous day’s closing levels of 11.12/14 and 11.16/18. In addition the 364 day bill was seen changing hands within the range of 10.83% to 10.85% in secondary markets subsequent to the auction.

Meanwhile the Public Debt Department (PDD) of Central Bank announced plans to conduct two bond auctions today for duration of 20 years (1 June 2033) and 30 years (1 June 2043) ahead of a Rs. 56 b bond maturity due on 15 June 2013. The amounts on offer will be Rs. 8 b and Rs. 5 b respectively, while the previously conducted 30 year auction fetched a weighted average of 12.50%.

In money markets yesterday, overnight call money and repo rates remained steady to average 8.56% and 8.14% respectively as surplus liquidity stood at Rs. 13.89 b.  The Open Market Operations (OMO) department of Central Bank drained an amount of Rs. 12.28 b at a weighted average of 7.76% by way of an overnight Repo auction.

Rupee gains marginally  

In Forex markets, the rupee gained marginally to close the day at Rs. 127.45/50 in comparison to its previous day’s closing levels of Rs. 127.65/70 on the back of selling interest on forward dollar contracts. The total USD/LKR traded volume for the previous day (11 June 2013) stood at US$ 70.75 million. Given are some forward dollar rates that prevailed in the market: one month – 128.15; three months – 129.53; six months – 131.53.