Weekly averages decline for the first time in eighteen weeks

Activity in secondary bond markets continues to remain high

By Wealth Trust Securities Ltd

Weekly weighted averages were seen declining for the first time in eighteen (18) weeks yesterday reversing an upward trend witnessed previously.  The 91 day bill recorded the sharpest decrease of 43 basis points to 8.47% closely followed by the 364 day bill by 41 basis points to 10.23% and the 182 day bill by 19 basis points to 9.57%. Interestingly, the total bids received amount was seen hitting a nineteen week high of Rs.81.90 billion with the bids to offer ration hitting an eighteen week high of 4.01:1 as well. The total accepted amount was seen exceeding the total offered amount of Rs. 20 billion by Rs.11.99 billion. Given below are the details of the auction, 

In secondary bond markets, volatility an activity continued to remain very high yesterday.  The liquid maturities of 01.05.20, 01.08.21, 15.03.25, 01.06.26 and 15.05.30 were seen decreasing to intraday lows of 11.45%, 11.55%, 12.09%, 12.25% and 12.50% respectively against its previous day’s closing levels of 11.70/80, 11.80/90, 12.15/25, 12.20/35 and 12.50/55. In addition, 2018 maturities were seen changing hands within the range of 10.50% to 10.75% as well. Furthermore in secondary bill markets continued buying interest post auction saw the 182 day bill change hands within the range 9.20% to 9.40% while the 364 day closed at 10.00/25. Given below are the closing, secondary market yields for the most frequently traded maturities,

Meanwhile in money markets, the net deficit was seen reducing to a six day low of Rs 12.85 billion yesterday as overnight call money and repo rates remained mostly unchanged to average at 8.15% and 8.07% respectively. The Open Market Operations (OMO) department of the Central Bank injected an amount of Rs.20.00 billion at a weighted average of 7.99% by way of an overnight reverse repo auction.

Rupee dips marginally 

Meanwhile in Forex markets yesterday, the USD/LKR rate on the active spot next contract dipped marginally to close the day at Rs.144.70/90 on the back of importer demand. The total USD/LKR traded volume for the 05th of April 2016 was US $ 52.55 million. Some of the forward USD/LKR rates that prevailed in the market were: one month – 145.55/85; three months – 147.30/60; and six months – 149.60/00.