Bond yields increase marginally ahead of weekly bill auction

By Wealth Trust Securities

The secondary bond market yields were seen increasing marginally yesterday with the liquid maturities of 01.03.21, 15.10.21 and 15.07.23 hitting intraday highs of 11.36%, 11.43% and 11.75% respectively against its previous day’s closing levels of 11.28/35, 11.30/45 and 11.65/70. 

In the secondary bill market, January and April 2019 maturities changed hands at levels of 9.75% and 10.00% to 10.05% respectively. 

At today’s auction, a total amount of Rs. 8 billion will be on offer which will consist of Rs. 2 billion on the 91 day maturity, Rs. 1 billion on the 182 day maturity and Rs. 5 billion on the 364 day maturity. At last week’s auction, the weighted average on the 91 day and 364 day bills increased by 72 and 68 basis points respectively to 9.28% and 10.19% while the 182 day bill was not on offer.

The total secondary market Treasury bond/bill transacted volume for 15 October 2018 was Rs. 6.66 billion. 

In the money market, the OMO Department of the Central Bank injected liquidity by way of an overnight and seven-day term repo auction for amounts of Rs. 12 billion and Rs. 4.41 billion respectively at weighted averages of 8.33% and 8.37% as the net liquidity shortfall increased to Rs. 28.28 billion yesterday. Furthermore, it infused an amount of Rs. 0.12 billion by way of a 14-day term repo auction at a weighted average rate of 8.40%, valued today. The call money and repo averaged 8.44% and 8.37% respectively.

Rupee dips further 

The rupee on its spot contract closed the day lower at Rs. 170.90/10 against its previous day’s closing of Rs. 170.50/70 on the back of continued importer demand. 

The total USD/LKR traded volume for 15 October was $ 53.00 million. Some of the forward USD/LKR rates that prevailed in the market were one month - 172.00/50; three months - 174.15/65 and six months - 177.25/75.