Activity at standstill ahead of T-Bill auctions

Tuesday, 2 November 2021 02:54 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The new trading month commenced on a dull note as activity in the secondary bond market was at a standstill yesterday with a majority of market participants opting to be on the sidelines. Only the 01.09.28 and 15.05.30 maturities were seen changing hands at levels of 11.61% to 11.65% and 11.75% to 11.76% respectively.

Today’s Treasury bill auction, conducted a day prior due to a shortened trading week, will have on offer a total amount of Rs. 66 billion, Rs. 9.5 billion above the previous week’s total offered volume. This will consist of Rs. 15 billion on the 91-day maturity, Rs. 20 billion on the 182-day maturity and Rs. 31 billion on the 364-day maturity. At last week’s auction, the total offered amount was fully accepted for a second consecutive week with the weighted average rate on the 91-day bill increasing by four basis points to 8.43%. The weighted average rate on the 364-day bill increased by one basis point to 8.18% while all bids received on the 182-day bill were rejected.

The total secondary market Treasury bond/bill transacted volume for 29 October was Rs. 2.91 billion.

In money markets, the net liquidity deficit stood at Rs. 167.26 billion yesterday while the Domestic Operations Department (DOD) of the Central Bank of Sri Lanka was seen draining out amounts of Rs. 18.75 billion and Rs. 4 billion by way of overnight and seven-day repo auctions respectively at weighted average rates of 5.99% each. An amount of Rs. 78.35 billion was deposited at the Central Bank’s SDFR (Standard Deposit Facility Rate) of 5% against an amount of Rs. 268.36 billion withdrawn from the Central Bank’s SLFR (Standard Lending Facility Rate) of 6%. The weighted average rates on overnight call money and repo remained broadly steady at 5.93% and 5.97% respectively.

USD/LKR

In the forex market, the USD/LKR rate on spot contracts traded at a level of Rs. 203 yesterday while overall activity remained moderate.

The total USD/LKR traded volume for 29 October was $ 27 million.

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