182 day bill weighted average yield continues to increase

Thursday, 13 December 2018 00:10 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The weighted average yield of the 182 day bill continued its increasing trend at yesterday’s weekly bill auction, recording a 02 basis point rise to 10.03%. Interestingly, the weighted average yield of the 364 day bill too increased by 04 basis points to 11.24% at the said auction. The total offered amount of Rs. 23 billion was successfully accepted as the bid to offer ratio stood at 2.10:1.

In the secondary bond market, it was a continuation of the dull sentiment witnessed over the last couple of days. Limited amount of trades were witnessed consisting of the two 2019 maturities (i.e. 01.05.19 and 01.07.29) and the 01.05.29 maturity at levels of 10.00% to 10.12% and 12.15% respectively.

This was ahead of the year’s final Treasury bond auction to be held today, to the tune of Rs. 50 billion, consisting of Rs. 25 billion each of a 3 year maturity and a 7 year and 8 months maturity. The previous Treasury bond auctions conducted on 13 November for the maturities of 15.06.27 and 01.05.29 recorded weighted average yields of 12.16% and 12.23% respectively.

The total secondary market Treasury bond/bill transacted volumes for 10 December was Rs. 4.90 billion.

Meanwhile in money markets, the OMO Department of the Central Bank was seen infusing liquidity by way of an overnight and a seven day term reverse repo auction for successful amounts of Rs. 20.00 billion each at weighted average yields of 8.70% and 8.74%, as the net liquidity shortfall in the system increased to Rs. 86.25 billion. The overnight call money rate averaged at 8.92%.

Rupee slides further

In the Forex market, continued buying interest by banks saw the USD/LKR rate on the spot rate dipping further to close the day at Rs. 179.50/65 against its previous day’s closing levels of Rs. 179.20/50.

The total USD/LKR traded volume for 11 December was $78.50 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 Month - 180.60/90; 3 Months - 182.60/90 and 6 Months - 185.60/90.