Weekly weighted averages resume downward trend

Thursday, 22 September 2016 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The weighted averages at yesterday’s weekly Treasury bill auction decreased once again after a lapse of one week, with the total accepted amount just falling short of the total offered amount of Rs. 16 billion.

The weighted average on the 91-day maturity decreased the most by four basis points to 8.71%, closely followed by the 182-day and 364-day maturities by two basis points and one basis point respectively to 9.69% and 10.38%.

In the secondary bond market yesterday, yields were seen increasing further on the back of continued selling interest with the belly end of the yield curve continuing to remain bunched up.

Activity centred on the maturities of 01.10.22, 01.06.26, 01.08.26, 01.09.28 and 15.05.30 as their yields increased to intraday highs of 11.54%, 11.67%, 11.69%, 11.80% and 12.00% respectively against the previous day’s closing levels of 11.46/53, 11.63/70, 11.62/68, 11.72/85 and 11.92/98.

In addition, the 2018 maturities were seen changing hands within the range of 10.80%-10.98% as well. Meanwhile, in the secondary bill market, the 364-day maturity was quoted at 10.33/35, post-auction. Given below are the closing secondary market yields for the most frequently traded maturities.Meanwhile, in money markets, the overnight call money and repo rates averaged 8.12% and 8.76% respectively as the Open Market Operations (OMO) department of the Central Bank continued to inject liquidity for an amount of Rs. 32.77 billion at a weighted average rate of 8.49%. The liquidity in the system stood at a net deficit of Rs. 41.63 billion yesterday.

Rupee dips further

In Forex markets yesterday the rupee on the spot next as well as one-week forward contracts lost ground marginally to close the day at Rs. 146.40/80 and Rs. 146.60/95 respectively against its previous day’s closing levels of Rs. 146.155/25 and Rs. 145.25/45 on the back of continued importer demand.

The total USD/LKR traded volume for 21 September 2016 was $ 32.95 million. Given below are some forward USD/LKR rates that prevailed in the market.