Demand persists for secondary market bills ahead of inflation announcement

Buying interest on secondary market Treasury Bills was evident yesterday as well, with the main focus being on the 364 day bill as considerable volumes were seen changing hands within the range of 11.50% to 11.55% once again.

Wealth Trust Securities said demand for odd dated bill maturities was apparent as well, centring on the 364 day duration.

It said the Central Bank increased the total amount to be offered at the next week Treasury bill auction to Rs.20 billion.

The 91 day maturity will consist of Rs. 2 billion, while the 182 day and the 364 day will consist of Rs. 6 billion and Rs. 12 billion respectively. At last week’s auction, weighted averages on all three maturities decreased to 10%, 11.32% and 11.69%.

Interestingly market participants were seen eagerly waiting for Inflation figures due to be announced on Monday, the first after the policy rate cut.  At last month’s point to point increased from 8.9% to 9.5% and the annualised average recorded an increase to a 14 month high of 7.20% from the previous month’s 6.80%.  However activity in the secondary bond market dried up yesterday as yields remained steady during the day with active two way quotes mainly seen on the five year and six year maturities at levels of 11.75%-11.85%, and 11.82%-11.92% respectively.

Wealth Trust Securities said in money markets, overnight call money and repo rates remained steady to average 9.83% and 8.95% respectively, despite market liquidity reversed back to a net deficit of Rs. 2.61 billion yesterday.

Demand...

However Central Bank refrained from conducting any Open market Operations (OMO) for a fourth consecutive day.

Rupee dips marginally

The rupee depreciated further to close the day at Rs. 127.15 from its previous closing of Rs. 127.The total US$/LKR volume for the previous working day (26 December 2012) was US$ 13.30 million. Some of the forward dollar rates that prevailed in the market were one month – 128.23; three months – 130.10; and six months – 132.73.