T Bill auction gets Rs. 56 b bids as primary market WAvgs plunge; 5-yr bond yields hit 22-month lows
Thursday, 5 December 2013 00:09
-
- {{hitsCtrl.values.hits}}
Substantial demand in terms of total bids received, which totaled up to a 10 month high of Rs. 55.8 billion saw weighted averages (WAvg) plunge at yesterday’s weekly Treasury bill auction, reflecting its eleventh (11) consecutive week of declines.
Wealth Trust Securities said once again it was the 364-day bill which reflected the sharpest decline of 19 basis points (bp) to 9.50%, while the 91-day and 182-day bills dipped by 9 bp and 15 bp respectively to 7.97% and 8.65%.
“Interestingly, the total amount accepted at the auction was equal to the initial total offered amount for the first time during this year which was at Rs. 11 billion, while the 364-day bill continued to dominate the auction as it represented 86% of the total accepted amount,” Wealth Trust Securities added.
Meanwhile in secondary bond markets the bullish momentum that was sustained further yesterday continued to be driven by speculations of the outcome of the monetary policy meeting for the month of December due Monday (9) and the outcome of the Treasury bill auction.
The overall yield curve continued to shift downwards as activity remained very high. The yields on the liquid two 2018 (i.e. 01.04.2018 and 15.08.2018) maturities were seen hitting intraday lows of 10.40% and 10.48%, levels last seen in February 2012 against its yesterday’s closing levels of 10.73/75 and 10.77/80.
In addition, the two and a half year maturity (01.04.2016) was seen closing the day at 9.75/85 while the three and a quarter year (01.01.2017) closed at 9.95/05 against their previous days closings of 10.06/10 and 10.25/30 respectively. Furthermore, buying pressure on secondary market bills post auction saw the 364-day bill change hands within the range of 9.25% to 9.35% while the 182-day and 91-day bills were seen quoted at 8.50/8.65 and 7.85/00 respectively.
Wealth Trust Securities also said the Open Market Operations (OMO) department of the Central Bank continued to mop up liquidity on a seven day basis for an amount of Rs. 9.60 billion at a weighted average of 7.43% while a further Rs. 11 billion was deposited at its widow rate of 6.50%. This in turn helped overnight call money and repo rates hold steady to average 7.77% and 7.11% respectively as surplus liquidity stood at Rs. 20.60 billion yesterday.
