Activity in secondary bond market moderates ahead of weekly bill auction

By Wealth Trust Securities

Activity in the secondary bond market moderated yesterday, ahead of today’s weekly Treasury bill auction, where a total amount of Rs. 12 billion will be on offer, consisting of Rs. 2 billion on the 91 day, Rs. 4 billion on the 182 day and Rs. 6 billion on the 364 day maturities. At last week’s auction, the weighted average yields of the 182 day and 364 maturities decreased to 8.87% and 9.49% respectively, with the 91 day bill remaining unchanged at 8.34%.

In the secondary bond market, limited volumes of the 2019 maturities (i.e. 01.05.19, 01.07.19, 15.09.19 and 01.11.19) were seen changing hands at levels of 9.45%, 9.55%, 9.60% and 9.68% to 9.75% respectively, while in the secondary bill market August 2018 and February 2019 bills were traded at levels of 8.25% and 9.10% to 9.20% respectively.

The total secondary market Treasury bond transacted volume for 8 June was Rs. 6.80 billion.

In money markets, the OMO Department of the Central Bank of Sri Lanka were seen infusing an amount of Rs.8.00 billion at a weighted average of 8.49%, by way of an overnight reverse repo auction as the net deficit in the system stood at Rs.8.42 billion. The overnight call money and repo rate averaged at 8.34% and 8.35% respectively.

Rupee losses further 

The USD/LKR rate on spot contracts depreciated further to close the day at Rs. 159.50/90 against its previous day’s closing levels of Rs. 158.95/10, on the back of importer demand.

The total USD/LKR traded volume for 8 June was $ 77.00 million.

Some of the forward USD/LKR rates that prevailed in the market were: 1 Month - 160.30/60; 3 Months - 161.90/40 and 6 Months - 164.20/60.