Yields dip marginally in thin trade ahead of weekly Treasury Bill auction

Tuesday, 11 February 2014 00:01 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities Activity in secondary bond markets moderated yesterday as yields dipped marginally in very thin trade as most market participants were seen adopting a wait-and-see policy due to the outcomes of the term repo auctions conducted over the past few days ahead of this week’s Treasury bill auction. Active two-way quotes were mainly seen on the liquid two 2018 maturities (i.e. 1 April 2018 and 15 August 2018) at levels of 9.10/20 and 9.20/28 while a limited amount of activity was witnessed on the three-year maturity of 15 July 2017 within the range of 8.88% to 8.95%. Furthermore in Secondary bill markets, durations centering the 91, 182 and 364 day maturities were quoted at levels of 6.65%-6.80%, 6.80%-6.90% and 7.05%-7.15% respectively. At today’s auction, an total amount of Rs. 12 billion will be on offer consisting of Rs. 1 b each on the 91 day and 182 day maturities and Rs. 10 b on the 364 day maturity respectively. At last week’s auction, all bids for the 91 day and 182 day maturities were rejected for the first time in 12 and 18 weeks respectively while the weighted average (WAvg) on the 364 day maturity decreased by four basis points to 7.10%. In money markets, overnight repo rate increased further to average 6.49% respectively as surplus liquidity decreased to Rs. 27.46 b yesterday. The WAvg on the three day term repo auction conducted by the Open Market Operations (OMO) department of Central Bank continued to fetch a high yield of 6.57% with an amount of Rs. 17.65 b being mopped up. Meanwhile overnight call money rate decreased marginally to average 6.71.

Rupee dips marginally The rupee closed the day marginally lower at Rs. 130.78/83 in comparison to its Friday’s closing levels of Rs. 130.65/70 on the back of importer demand. The total USD/LKR traded volume for the previous day (7 February 2014) stood at US$ 42.83 million. Some of the forward dollar rates that prevailed in the market were: one month – 131.18; three months – 132.06; and six months – 133.33.