Bond market yields increase marginally ahead of weekly bill auction

• Auction offered amount dips close to two and a half year low

 By Wealth Trust Securities

The secondary market bond yields increased marginally yesterday on the back of selling interest and profit-taking ahead of today’s weekly Treasury bill auction. 

Yields on the 15.03.23 and 15.03.28 maturities were seen increasing to intraday highs of 10.42% and 10.65% respectively against its previous day’s closing levels of 10.35/40 and 10.57/65. In addition, the two 2019s (i.e. 01.07.19 and 15.09.19), 01.05.20, 01.08.21 and 01.09.28 maturities  were seen changing hands at levels of 9.60% to 9.65%, 9.75%, 10.00% and 10.60% respectively.

Today’s Treasury bill auction will see a two and a half year low volume of Rs. 10 billion on offer consisting of Rs. 2.5 billion each on the 91 day and 182 day bills and a further Rs. 5 billion on the 364 day bill. 

At last week’s auction, weighted averages on the 91 day and 182 day bills decreased by three and one basis points respectively to 8.34% and 8.93% while the weighted average on the 364 day decreased by 11 basis points to 9.62%.

The total secondary market Treasury bond transacted volume for 4 June 2018 was Rs. 5.13 billion.

In money markets, the overnight call money and repo rates averaged 7.95% and 7.98% respectively while the net deficit in the system stood at Rs. 15.82 billion yesterday. The OMO Department of the Central Bank of Sri Lanka infused an amount of Rs. 12 billion at a weighted average of 8.50%, by way of an overnight reverse repo auction.

Rupee dips marginally 

The USD/LKR rate on spot contracts depreciated marginally yesterday to close the day at Rs. 158.60/70 against its previous day’s closing levels of Rs. 158.45/55 on the back of importer demand.

The total USD/LKR traded volume for 4 June 2018 was $ 51.60 million.

Some of the forward USD/LKR rates that prevailed in the market were one month - 159.35/50; three months - 160.95/10 and six months - 163.25/35.