Weekly averages continue to decline

• Secondary market bond yields follow suit
  
   

By Wealth Trust Securities

The weekly Treasury bill weighted averages continued its decreasing trend at its auctions conducted yesterday. The 364 bill decreased the most by 10 basis points to 10.75% closely followed by the 182 day bill by 07 basis points to 9.87%. The total offered amount of Rs. 26 billion was subscribed for at the auction as the bid to offer ratio stood at 2.68:1. 

The positive momentum in the secondary bond market continued yesterday as yields were seen decreasing further on the back of continued buying interest. Yields were seen decreasing across the board with the maturities of three 2021’s (i.e. 01.05.21, 01.08.21 and 15.12.21), two 2023’s (i.e. 15.03.23 and 15.12.23), 15.03.25 and two 2026’s (i.e. 01.06.26 and 01.08.26) hitting daily lows of 10.87%, 10.90% each, 11.20%, 11.25%, 11.50% each, and 11.48% respectively against its opening highs of 10.95%, 11.00% each, 11.27%, 11.39%, 11.59%, 11.58% and 11.60%. In the secondary bill market, November and December 2018 along with January 2019 maturities were traded at levels of 10.50% to 10.60%, and 10.63% to 10.78% respectively in pre and post auction sessions while latest 01 year bill was quoted at 10.55/70 subsequent to auction outcome.

The total secondary market Treasury bond/bills transacted volume for 14 January was Rs. 14.53 billion. 

In the money market, the overnight call money and repo rates averaged 8.99% as the OMO Department of the Central Bank infused liquidity by way of an overnight reverse repo auction for successful amount of Rs. 20 billion, at a weighted average yield of 9.00%. The net liquidity shortfall stood at Rs. 88.46 billion yesterday.

 

Rupee loses further

The USD/LKR rate on spot contracts was seen depreciating further to close the day at levels of Rs. 182.35/45 against its previous day’s closing levels of Rs. 182.20/35 on the back of continued importer demand and buying interest by banks.

The total USD/LKR traded volume for 14 January was $ 47.76 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 month - 183.30/45; 3 months - 185.10/20 and 6 months - 188.05/20.