Weekly weighted averages continue downward slope

Thursday, 27 March 2014 00:00 - - {{hitsCtrl.values.hits}}

Total accepted amount lower than total offered amount for the first time in nine weeks

By Wealth Trust Securities Reversing a trend that was witnessed over the past eight weeks, the total accepted amount at yesterday’s weekly Treasury bill auction was lower

than its initial total offered amount for the first time in nine weeks as total bids received dipped to a 27 week low of Rs. 22.6 billion. The total accepted volume amounted to Rs. 8.2 b, which was a 22 week low as well against its initial total offered amount of Rs. 10 b. Weighted averages (WAvgs) declined by one basis point each on the 91 day and 182 day maturities to levels of 6.65% and 6.82% while the WAvg on the 364 day maturity remained unchanged for the first time in three weeks to record a level of 7.05%. Meanwhile, in secondary bond markets, the downward trend witnessed in yields over the past few days came to halt as yields were seen increasing marginally yesterday on the back of profit taking. Activity continued to surround the liquid two 2018 maturities (i.e. 1 April 2018 and 15 August 20) and the 1 July 2019 maturity from opening lows of 8.88%, 8.95% and 9.27% respectively to highs of 8.90%, 9.00% and 9.36%. However, buying interest at these levels curtailed any further upward movement ahead of today’s Treasury bond auction, the first of such in one month. The bond auction, in line with the Rs. 103.2 b bond maturity due on 1 April will see in total an amount of Rs. 5 b being auctioned consisting of Rs. 2 b each on 1 January 2034 and 1 January 2044 maturities and Rs. 1 b on 1 July 2022 maturity carrying coupons of 13.25%, 13.50% and 11.20% respectively. In secondary bill markets, the 364 day bill was quoted at levels of 7.03/08 and the 182 day bill at levels of 6.85/95 subsequent to the auction. Liquidity dips to a two week low In money markets, surplus liquidity was seen dipping to a two week low of Rs. 0.99 billion yesterday as the no Open Market Operations (OMO) was conducted for a second consecutive day. However, overnight call money and Repo rates continued to remain steady to average 6.96% and 6.45% respectively. Rupee closes the day steady The dollar/rupee (USD/LKR) rate remained mostly unchanged within the range of Rs.130.70-Rs.130.75 yesterday as markets were at equilibrium. The total USD/LKR traded volume for the previous day (25 March) stood at US$ 36.40 million. Some of the forward dollar rates that prevailed in the market were: one month – 131.38; three months – 132.53; and six months – 133.98.