Six months Treasury Bill WAY jumps against expectations

Wednesday, 1 August 2012 02:36 - - {{hitsCtrl.values.hits}}

The six months Treasury Bill Weighted Average Yield (WAY) rose yesterday contrary to market expectations, Wealth Securities Ltd said.

“Against market expectations and the downward momentum created at last week’s auction, the six months bill weighted average edged up by two basis points to 12.87% at its weekly Treasury bill auction held yesterday,” the debt market specialist told the Daily FT.

“Furthermore, a healthy amount of Rs. 18.4 billion was accepted on this maturity, signifying the market’s appetite for this duration, as has been the trend over the past few weeks,” Wealth Trust added.

The WAY on the 91 day bill and 364 day bill remained unchanged at 11.35% and 13.15% respectively.

An additional 23.33% or Rs. 4.2 billion was accepted from the auction against its initial offered amount of Rs. 18 billion.

Wealth Trust also said secondary market Treasury yields increased on the back of inflation.

“In line with the announcement of inflation numbers with point to point average reaching a 42-month high of 9.80% and the outcome of the Treasury bill auction, secondary market bill and bond rates increased, with the 20 month bond and the four-year bond reflecting the most amount of activity. Yields edged up by around four to six basis points on these two maturities in comparison to its previous days closings,” Wealth Trust said.

Overnight call money and repo rates averaged 10.47% and 9.47% respectively yesterday, as surplus liquidity remained high at Rs. 47.5 billion. The Central Bank drained out an amount of Rs. 43.3 billion on an overnight basis at a weighted average of 9.42% through its Open Market Operations (OMO).

In foreign exchange market, Wealth Trust said the rupee closed the day mostly unchanged at Rs. 131.75/131.85 after hitting an intraday low of Rs. 131.95 in morning trading.