Weekly averages continue increasing trend

By Wealth Trust Securities

The weighted averages at yesterday’s weekly Treasury bill auction continued to increase as the 91 day and 182 day bills recorded increases of five and 27 basis points respectively to 8.71% and 9.67%. However all bids received for the 364 day bill were rejected for the first time in 10 weeks. Nevertheless, the total accepted amount exceeded the total offered amount of Rs.30 billion by Rs.0.70 billion due to the 182 day bill drawing Rs.21.78 billion in successful bids. 

Activity in the secondary bond market picked up marginally yesterday as yields were seen closing the day broadly steady subsequent to increasing in morning hours of trading. The liquid maturities of 01.05.2020 and 01.06.2026 saw its yields edge up to intraday highs of 12.14% and 13.00% and dip once again to lows of 12.03% and 12.90%. 

This was ahead of today’s bond auctions at where a total amount of Rs.45 billion is on offer consisting of Rs.10 billion on a 2.04 year maturity of 15 October 2018, Rs.15 billion on a 5.04 year maturity of 15 October 2021, Rs.12 billion on a 7.07 year maturity of 1 January 2024 and a further Rs.8 billion on a 10 year maturity of 1 June 2026. The bond auctions held on 19 May recorded weighted averages of 11.75%, 12.11%, 12.40% and 12.82% respectively on the maturities of 15.11.2018, 01.05.2020, 01.01.2024 and 01.06.2026. 

Meanwhile in money markets, overnight call money and repo rates remained steady to average 8.15% and 7.99% respectively as the net surplus liquidity in the system increased to Rs.13.67 billion yesterday

Rupee continues 

to slide  

The USD/LKR rate on the active spot next contract depreciated further to close the day at Rs.147.00/20 against its previous day’s closing level of Rs.146.95/00 on the back of continued importer demand. The total USD/LKR traded volume for 24 May was $ 58.25 million.

Given are some forward USD/LKR rates that prevailed in the market: one month – 147.90/10; three months – 149.50/80; six months – 151.80/10.