Bond market remains dismal ahead of Treasury bond auctions

By Wealth Trust Securities

The dull momentum in secondary bond markets continued yesterday with most market participants remaining on the sidelines. 

This was ahead of today’s Treasury bond auctions, where a total amount of Rs. 66 billion will be on offer consisting of four maturities. The 1.11 year maturity of 15.01.2019 will have on offer Rs. 9 billion while the 4.10 year maturity of 15.12.2021, the 7.05 year maturity of 01.08.2024 and the 9.05 year maturity of 01.08.2026 will have Rs. 19.0 billion each on offer. All bids received for the same four maturities were rejected at its auctions conducted on 20 February. 

The OMO department of the Central Bank was seen infusing an amount of Rs. 25.93 billion yesterday at a weighted average of 8.48% by way of an overnight reverse repo auction as call money and repo averaged 8.49% and 8.68% respectively yesterday. The net deficit stood at Rs. 43.59 billion. 

Rupee slides further

 In Forex markets yesterday, continued importer demand and foreign selling in rupee bonds saw the USD/LKR rate on active two weeks and one month forward contracts dipping considerably to close the day at Rs. 153.15/60 and Rs. 153.55/80 respectively against its previous day’s closing levels of Rs. 152.85/00 and Rs. 153.20/35. The total USD/LKR traded volume for 21 February 2017 was $ 84.50 million. Some of the forward USD/LKR rates that prevailed in the market were three months - 155.50/70 and six months -158.60/00.