Yields remain broadly steady ahead of Treasury bond auctions

By Wealth Trust Securities

Secondary market bond yields remained mostly unchanged yesterday ahead of the Treasury bond auctions due today. 

The liquid maturities of 15.12.21, 01.08.24 and the 01.08.26 were seen quoted at levels of 11.17/19, 11.30/35 and 11.32/38 respectively.

Today’s Treasury bond auction, in lieu of a Treasury bond maturity of Rs. 82.08 billion due on 15 July, will have on offer a total amount of Rs. 65 billion consisting of Rs. 16 billion on a 4.05-year maturity of 15.12.2021, Rs. 19 billion on a 5.10-year maturity of 15.05.2023 and Rs. 15 billion each on a 7.08-year maturity of 15.03.2025 and a 9.11-year maturity of 15.06.2027. 

The weighted average yields at the auctions conducted on 13 June 2017 for the maturities of 01.08.2021, 15.05.2023, 15.03.2025 and 15.06.2027 were at 11.37%, 11.38%, 11.41% and 11.49% respectively.

The total secondary market Treasury bond transacted volume for 7 July 2017 was Rs. 4.31 billion. Meanwhile, in money markets, the overnight call money and repo rates averaged at 8.75% and 8.79% respectively as the Open Market Operations (OMO) Department of the Central Bank of Sri Lanka was seen injecting an amount of Rs. 15.00 billion on an overnight basis by way of a Reverse Repo auction at a weighted average rate of 8.75%. The liquidity in the system stood at a net deficit of 11.71 billion.

Rupee losses marginally  

In the Forex market, the USD/LKR rates on spot contracts were seen depreciating marginally to close the day at Rs. 153.70/80 subsequent to trading at a low of Rs. 153.75 against its previous day’s closing levels of Rs. 153.60/70, on the back of continued importer demand.

The total USD/LKR traded volume for 7 July 2017 was $ 34.83 million.

Some of the forward USD/LKR rates that prevailed in the market were one month - 154.80/90; three months - 156.70/80 and six months - 159.65/75.