Weekly Treasury bill auction successfully attracts over Rs. 22 b
Wednesday, 26 February 2014 00:00
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By Wealth Trust Securities
The weighted averages at the weekly Treasury bill auction continued to dip as it successfully attracted over Rs. 22 billion after a lapse of four weeks.
It was the 91 day bill which reflected the sharpest decline of 03 basis points (bp) to 6.72% whiles the 182 day and 364 day bills dipped by one basis point each to 6.89% and 7.07%. The fact that an amount of Rs. 22 b was accepted against an initial offered amount of Rs. 12 b could have been in order to curtail any serious downward pressure on the weighted averages.
However, contrary to the movement in the primary market, secondary market bond yields increased marginally following the release of the auction results, reversing the trend that prevailed over the past few days. Once again activity surrounded the two liquid 2018 maturities (i.e. 1 April 2018 and 15 August 2018) and the 1 July 2019 maturity with trading closing at levels of 8.76/78, 8.83/88 and 8.95/00 respectively as against opening quotes of 8.72/74, 8.80/85 and 8.90/92.
In the secondary bill market the 364 day bill, which was quoted at levels of 7.02% to 7.07% prior to the auction, was quoted at levels of 7.00% to 7.10% post auction while the 182 day bill was at 6.80/90.
In the meantime, today’s decisive bond auction, the first in one-and-a-half months, will have on offer an total amount of Rs. 3 billion, with Rs. 1 b each maturing on 1 July 2022, 1 January 2024 and 1 January 2029 with semi-annual coupons of 11.20%, 11.40% and 13.00% respectively. This is in line with an Rs. 100.3 b bond maturity due on 1 March.
Meanwhile in money markets, the total surplus amount of Rs. 11.76 billion was deposited at CBSL’s Standing Deposit Facility Rate (SDFR) of 6.50% as the CBSL refrained from conducting any auction under its Open Market Operations (OMO). This in turn helped overnight call money and repo rates to hold its levels to average 6.95% and 6.43% respectively.
Rupee closes the day steady
The dollar/rupee rate remained mostly unchanged within the range of Rs.131-Rs.131.05. The total USD/LKR traded volume for the previous day (24 February) stood at US$ 38.10 million. Given are some forward dollar rates that prevailed in the market: one month – 131.65; three months – 132.58; and six months – 134.05.
