Primary auction averages continue increasing trend

Thursday, 19 February 2015 00:00 -     - {{hitsCtrl.values.hits}}

The increasing trend in weighted averages (WAvgs) at the weekly conducted Treasury bill auction continued yesterday as well with the 91 day bill reflecting the highest jump of six basis points (bp) to 5.94%. This was closely followed by the 182 day bill as it reflected an increase of five bp to 6.03% and the 364 day bill by two bp to 6.12%. The 91 day bill dominated the auction as it represented 39.96% of the total accepted amount, which was Rs. 1.4 billion lower than its initial total offered amount of Rs. 10 billion. Activity in secondary bond markets increased yesterday as yields was seen increasing during the day leading to the auction and post auction as well. Activity centered the liquid two 2018 maturities (i.e. 1 April 2018 and 15 August 2018) and the 1 July 2022 maturity as its yields hit intraday highs of 7.23%, 7.25% and 7.80% respectively against its days opening lows of 7.17%, 7.18% and 7.73%. In secondary market bills, November 2015 maturities were seen changing hands at 6.20% pre-auction but closed the day at 6.10/20 post auction once again. In money markets, the Open Market Operations (OMO) department of Central Bank mopped up an amount of Rs. 9.05 b from the system for a two day period by way of a Repo auction at a weighted average of 5.95% as surplus liquidity in money markets on an overnight basis stood at Rs. 34.83 Billion yesterday. The overnight call money and repo rates decreased further to average 6.03% and 5.62% respectively. Rupee remains stagnant The spot and spot next contracts remained stable at levels of 132.80/00 and 132.86/00 respectively as markets remained inactive. The total USD/LKR traded volume for 16 February was at $ 38.65 million. Some of the forward USD/LKR rates that prevailed in the market were one month – 133.46; three months – 134.68; and six months – 135.90.