Bond market muted ahead of weekly Treasury bill auction

Tuesday, 24 December 2019 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The sluggish sentiment continued in the secondary bond market at the commencement of a fresh shortened trading week yesterday, ahead of today’s Treasury bill auction. Only the 15.12.21 and 15.03.23 maturities traded at 8.87% and 9.40% respectively.

Today’s weekly bill auction will have on offer a total amount of Rs. 13.5 billion consisting of Rs. 1 billion of the 91-day maturity, Rs. 5 billion of the 182-day maturity and a further Rs. 7.5 billion of the 364-day maturity. At last week’s auction, weighted averages increased across the board with 91-day, 182-day and 364-day maturities increasing by 6, 32 and 22 basis points respectively to 7.51%, 7.97% and 8.45%.

In secondary bills, the latest 364-day maturity changed hands within the range of 8.45% to 8.50%.

The total secondary market Treasury bond transacted volume for 20 December was Rs. 11.03 billion.

In money markets, the overnight call money and repo rates averaged at 7.51% and 7.57% respectively as the Open Market Operations (OMO) Department of the Central Bank of Sri Lanka injected an amount of Rs. 15 billion on an overnight basis by way of a Reverse Repo auction at a weighted average rate of 7.50%. The overnight net liquidity surplus in the system stood at Rs. 24.04 billion.

Rupee loses

In the Forex market, the USD/LKR rate on spot contracts were seen depreciating yesterday to close the day at Rs. 181.30/40 against its previous day’s closing levels of Rs. 181.05/15 on the back of buying interest by banks. The total USD/LKR traded volume for 20 December was $ 53.51 million. Some of the forward USD/LKR rates that prevailed in the market were 1 month – 181.75/90; 3 months – 182.65/85 and 6 months – 184.40/70.