Weekly averages dip for first time in 17 weeks

By Wealth Trust Securities

Secondary bond markets continue bullish momentum on high turnover

The weighted averages of the weekly Treasury bill auction was seen dipping yesterday reversing an upward and stagnant trend witnessed over the previous 17 weeks. 

It was the 364 day bill which witnessed the sharpest drop of eight basis points (bp) to 7.10% followed by the 91 day and 182 days bills dipping by five bp and three bp respectively to 6.73% and 7.04%. A total amount of Rs.23.9 billion was accepted at the auction against its initial total offered amount of Rs. 25 billion. 

The bullish momentum in secondary market bonds continued yesterday and was given further imputes by the outcome of the Treasury bill auction. Yields were seen declining by 30 to 40 basis points across the yield curve on back of significant buying interest as activity remained very high. Yields on the two 2018 maturities (i.e. 1 April 2018 and 15 November 2018), the two 2019 maturities (i.e. 1 July 2019 and 15 September 2019), the 1 May 2020, 1 August 2021, 1 October 2022 and 1 September 2023 were seen hitting intraday lows of 8.80%, 8.90%, 9.05% each, 9.10%, 9.30% and 9.40% each respectively.

Meanwhile, on the short end of the curve, the 15.05.17 maturity was seen dipping to a low of 7.95% while on the long end the 1 August 2025 and 1 September 2028 hit lows of 9.70% and 10.30% respectively.

Meanwhile in money markets, the decreasing trend witnessed on overnight call money and repo rates continued yesterday as well to average 6.35% each as surplus liquidity remained high at Rs. 59.19 b.

 

 Rupee dips further

 The rupee on spot contracts dipped further yesterday to close the day at Rs.140.90/95 subsequent to hitting an intraday low of Rs. 141 against its previous day’s closing levels of Rs.140.55/65 on the back of continued importer demand outweighing export conversions and inward remittances. The total USD/LKR traded volume for 13 October was $ 77.65 million. 

Given are some forward USD/LKR rates that prevailed in the market: one month – 141.50/60; three months – 142.70/00; six months – 144.35/45.