Foreign selling in the secondary bond market continues ahead of weekly bill auction

By Wealth Trust Securities

Moderate activity was witnessed in the secondary bond market yesterday, with buying interest from local investors during the morning session and selling interest from foreign investors in the afternoon session. 

Maturities of 01.04.18, 15.11.18, 15.09.19 and 01.03.21 were seen dipping to lows of 11.00%, 11.30%, 11.70% and 11.92% prior to foreign investors entering the market to sell the 01.04.18 and 15.09.19, pushing their rates up to highs of 11.15% and 11.85% respectively. 

This was ahead of today’s weekly Treasury bill auction, where a total of Rs. 25 billion will be on offer consisting of Rs. 9 billion each of the 91 day and 182 day maturities and Rs. 7 billion of the 364 day maturity. 

At last week’s auction, the weighted averages of the 182 day and 364 day maturities dipped by 16 and 15 basis points respectively to 9.55% and 10.10% while the yield of the 91 day maturity remained unchanged at 8.60%. 

Given below are the closing, secondary market yields of the most frequently traded maturities, 

Meanwhile in money markets, the outright purchase auctions conducted by the Open Market Operations (OMO) Department of the Central Bank were unsuccessful once again as no bids were accepted. The overnight call money and repo rates remained mostly unchanged to average 8.40% and 8.56% respectively as the net deficit in the market stood at Rs. 6.55 billion. 

Spot next contracts remain steady

The dollar/rupee rate on spot next contracts remained mostly unchanged to close the day at Rs. 148.90/95 with moderate activity. 

The total USD/LKR traded volume for the 5 December 2016 was $ 43.64 million. Given below are some forward USD/LKR rates that prevailed in the market.          

1 Month   -        149.70/90    

3 Months  -       151.30/50

6 Months -        153.65/80