364 day bill Weighted Average yield increases for the first time in three weeks

Wednesday, 8 January 2020 00:00 -     - {{hitsCtrl.values.hits}}


By Wealth Trust Securities

The market favorite 364 day bill weighted average yield was seen increasing for the first time in three weeks at the weekly Treasury bill auction conducted yesterday as the ratio of total bids received to total offered amount decreased to a three-week low of 1.91:1 as well. 

It recorded an increase of seven basis points to 8.52% while the weighted average on the 182 day bill increased by a steeper margin of 11 basis points to 8.13%. Nevertheless, the 91 day bill reflected a drop of one basis point to 7.50% with only an amount of Rs. 0.1 billion been accepted against its offered amount of Rs. 2 billion. 

The total offered amount of Rs. 25 billion was successfully met at the auction as a result of the 364 day bill drawing Rs. 20.8 billion in successful bids against its offered amount of Rs. 16 billion. 

The Secondary bond market remained active yesterday as yields were seen increasing further on the back of continued selling interest, mainly subsequent to the auction outcome. The yields of the liquid maturities of 2023’s (i.e.15.03.23 and 15.07.23) and 2024’s (i.e. 15.06.24 and 15.09.24) were seen increasing to intraday highs of 9.28%, 9.30% and 9.75% each respectively against its previous day’s closing levels of  9.20/30, 9.25/30, 9.62/64 and 9.62/65. 

Furthermore, maturities of 15.12.23 and 2027’s (i.e. 15.01.27, 15.06.27 and 15.10.27) traded at levels of 9.40% to 9.43% and 9.78% to 9.85% respectively.

The total secondary market Treasury bond/Bill transacted volume for 6 January 2020 was Rs. 4.6 billion.

In money markets, the Domestic Operations Department (DOD) of the Central Bank of Sri Lanka refrained from conducting any liquidity management auctions yesterday as the overnight net liquidity surplus in the system increased further to Rs. 39.55 billion. The overnight call money and repo rates averaged 7.49% and 7.52% respectively.

Rupee appreciates marginally

In the Forex market, the USD/LKR rate on spot contracts was seen appreciating marginally yesterday to close the day at Rs. 181.25/35 against its previous day’s closing levels of Rs. 181.30/40 on the back of selling interest by banks.

The total USD/LKR traded volume for 6 January 2020 was $ 91.10 million.

Some of the forward USD/LKR rates that prevailed in the market were one month - 181.75/90; three months - 182.75/95 and six months - 184.45/75.

(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, money broking companies)