Weekly averages continue to decrease

• Activity in secondary bond markets increase

 By Wealth Trust Securities

The weighted averages at yesterday’s weekly Treasury bill auction decreased across the board for a second consecutive week with an amount of Rs. 28.97 billion accepted in total against its total offered amount of Rs. 29.00 billion.  

The 182-day bill continued to dominate the auction as it reflected the highest accepted amount of Rs. 18.89 billion or 65.23% of the total accepted amount with its weighted average decreasing by one basis point to a 13-week low of 10.34%. The weighted averages of the 91-day and 364-day bills were down by one and 10 basis points respectively to 9.60% and 10.61%.

Activity in secondary bond markets increased yesterday as yields were seen seesawing during the day as selling interest during the morning hours of trading saw yields increase. The liquid maturities of two 2024 maturities (i.e. 01.01.24 and 01.08.24) and 01.08.26 were seen increasing to intraday highs of 11.75% each and 11.79% respectively against its previous day’s closing levels of 11.67/72, 11.72/78 and 11.73/80. However, buying interest towards the latter part of the day saw yields decreasing once again with said maturities hitting lows of 11.70%, 11.71% and 11.75% respectively. 

In addition, the maturities of 15.12.21, 01.07.22, 15.03.25 and 15.05.30 were seen changing hands at levels of 11.55%, 11.65%, 11.78% and 11.85% to 11.95% respectively.

The total secondary market Treasury bond transacted volume for 5 June 2017 was Rs. 2.25 billion.

In money markets, the Open Market Operations (OMO) Department of the Central Bank of Sri Lanka was seen injecting an amount of Rs. 2.00 billion on an overnight basis by way of a Reverse Repo auction at a weighted average rate of 8.75% as liquidity in the system stood at a deficit of 0.22 billion yesterday. The overnight call money and repo rates averaged 8.75% and 8.84% respectively.

Rupee loses marginally 

The USD/LKR rate on spot next contracts depreciated marginally to close the day at Rs.152.88/93 against its previous day’s closing levels of Rs. 152.85/90 on the back of importer demand.

 The total USD/LKR traded volume for 5 June was $ 42.40 million. Some of the forward USD/LKR rates that prevailed in the market were one month - 153.85/95; three months - 155.90/20 and six months -158.90/10.