Weekly primary auction rates resume its downward trend

Thursday, 11 September 2014 02:28 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities The weighted averages (WAvgs) at yesterday’s weekly Treasury bill auction dipped by one basis point each on the 91 day, 182 day and 364 day maturities to 6.18%, 6.27% and 6.29% respectively against market expectations for WAvgs to remain unchanged.

An additional amount of Rs. 1.5 billion was accepted at the auction against its total offered amount of Rs. 5 b reflecting renewed buying interest in the market as the total accepted amount exceeded the total offered amount for the first time in four weeks.

Meanwhile continued demand in secondary bill markets saw January 2015 bills changing hands within the range of 6.20% to 6.28% and May 2015 bills within the range of 6.28% to 6.30% while the 364 day bill closed the day at 6.28/32. In line with the outcome of the Treasury bill auction, secondary market bond yields dipped yesterday as activity remained high, mainly on the liquid maturities of 1 April 2018, 15 August 2018 and 1 July 2019 as its yields were seen hitting intraday lows of 7.20%, 7.25% and 7.48% respectively against its previous day’s closing levels of 7.25/30, 7.28/35 and 7.50/55. In addition the eight year maturity of 1 July 2022 was seen changing hands within the range of 8.10% to 8.15% as well. Meanwhile in money markets, an amount of Rs. 32.79 billion was deposited at Central Bank’s Standing Deposit Facility Rate (SDFR) of 6.50% once again as Central bank refrained from conducting any auctions under its Open Market Operations (OMO) for a second consecutive day. Overnight call money and repo rates remained steady to averaged 6.70% and 6.52% respectively. USD/LKR spot next contracts witness some interest In forex markets, activity on USD/LKR spot contracts dried up yesterday as trades were seen taking place on spot next contracts within the range of 130.28/32. The total USD/LKR traded volume for 9 September was at $ 59.10 million. Some of the forward dollar rates that prevailed in the market were: one month – 130.74; three months – 131.40; six months – 132.38.