Secondary market bond yields increase marginally ahead of bill auction

Tuesday, 24 July 2018 00:00 -     - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

Secondary market bond yields were seen increasing marginally yesterday, on the back of moderate volumes changing hands ahead of today’s weekly Treasury bill auction. Selling interest saw yields on the maturities of two 2021’s (i.e. 01.03.21 and 01.05.21), 15.03.23, 01.08.24, 15.06.27, and 01.09.28 increase to intraday highs of 9.80%, 9.83%, 10.25%, 10.35%, 10.60%, and 10.55% respectively, while on the shorter end of the curve, 15.08.18 and 15.09.19 were seen changing hands at levels of 8.57% and 9.30% to 9.35% respectively as well.

At today’s auction, a total amount of Rs. 24 billion will be on offer, which will consist of Rs. 6.0 billion each on the 91 day and 182 day maturities, and a further Rs. 12 billion on the 364 day maturity. At last week’s auction, the weighted averages decreased across the board by 12, 10, and 12 basis points respectively to 8.25%, 8.75%, and 9.31%. In money markets, the OMO (Open Market Operations) Department of the Central Bank of Sri Lanka drained out an amount of Rs.8.00 billion on an overnight basis by way of a Repo auction at a weighted average of 8.00% as the net surplus in the system stood at Rs.13.70 billion yesterday. The OMO department further drained out an amount of Rs.10.00 billion at a weighted average rate of 8.23% for 14 days, valued today. The overnight call money and repo rates averaged at 8.50% and 8.35% respectively.

Rupee appreciates

In the Forex market, the USD/LKR rate on spot contracts appreciated to close the day at Rs. 159.50/60 against its previous day’s closing levels of Rs. 159.90/00 on the back of selling interest on spot and forward dollar contracts. The total USD/LKR traded volume for 20 July was $ 77.75 million.

Some forward USD/LKR rates that prevailed in the market: 1 Month - 160.35/55; 3 Months - 161.85/15; 6 Months - 164.20/80.