Bond market yields end mostly unchanged ahead of weekly bills auction

By Wealth Trust Securities

The secondary bond market yields were seen closing the day mostly unchanged against its previous days closings, subsequent to increasing during morning hours of trading. Selling interest on the three liquid maturities of 01.08.26 and the two 2027’s (i.e. 15.01.27 and 15.06.27) saw its yields increase to daily highs of 11.16%, 11.20% and 11.27% respectively.  However, buying interest at these levels curtailed the upward movement while activity was witnessed on the maturities of the two 2021’s (i.e. 01.08.21 and 15.12.21), two 2023’s (i.e. 15.07.23 and 15.12.23), 15.03.25, 01.09.28 and 01.05.29 at levels of 10.70% to 10.75%, 10.77% to 10.79%, 10.90% to 10.95%, 10.90% to 10.94%, 11.15%, 11.32%, 11.35% to 11.37% respectively as well.

At today’s weekly Treasury bill auction, a total amount of Rs. 24 billion will be on offer, consisting of Rs. 4 billion on the 91 day, Rs. 6 billion on the 182 day and Rs. 14 billion on the 364 day maturities. At last week’s auction, the weighted average on the 364 day bill decreased by 06 basis points to 10.67% while all bids received on the 182 day and 91 day bills were rejected.

The total secondary market Treasury bond/bill transacted volumes for 1 March was Rs. 13.61 billion.

In the money market, the overnight call money and repo rates averaged at 8.89% and 8.93% respectively as the net liquidity shortfall decreased further to Rs.27.41 billion yesterday. The Open Market Operations (OMO) department of Central Bank was seen infusing an amount of Rs. 10.00 billion by way of an overnight reverse repo auction at a weighted average of 9.00%.

Rupee appreciates  

The rupee rate on its spot contract was seen appreciating yesterday to close the day at Rs. 179.00/10 against its previous day’s closing level of Rs. 179.55/70 on the back of selling interest by banks.

The total USD/LKR traded volume for 1 March was $ 110.21 million.

Some of the forward USD/LKR rates that prevailed in the market were: 1 month - 179.95/10; 3 months - 181.80/10 and 6 months - 184.65/95.