Bond market muted ahead of weekly bill auction

Wednesday, 7 October 2020 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The activity in the secondary bond market remained rather dull yesterday, ahead of today’s weekly Treasury bill auction.

The auction will see a total amount of Rs. 40 billion on offer, consisting of Rs. 7.5 billion on the 91 day, Rs. 15 billion on the 182 day and Rs. 17.5 billion on the 364 day bill maturities. Stipulated cut off rates were published as 4.57%, 4.70% and 4.99% respectively. At last week’s auction, the weighted average rate on the 364 day maturity increased by one basis point to 4.89% while the weighted average rate on the 182 day maturity remained steady at 4.64%. All bids received on the 91 day bill were rejected while the total accepted amount was seen falling short of the total offered amount for a third consecutive week.

In secondary bills, 23 October and 18 December 2020 maturities were traded at 4.65% and 4.57% to 4.68% respectively.

In the bond market, limited trades were seen on the maturities of 15.12.22, 15.01.23 and 15.09.24 at levels of 5.75%, 5.85% and 6.30% respectively. The total secondary market Treasury bond/bill transacted volumes for 5 October 2020 was Rs. 4.62 billion.

In the money market, the weighted average rates of overnight call money and Repos were recorded at 4.53% and 4.61% respectively yesterday as the overnight net liquidity surplus increased to 160.02 billion. The Rs.15 billion reverse repo auction for seven days drew no bids yesterday.

LKR appreciates

In the Forex market, USD/LKR rate on spot contracts was seen closing the day marginally higher yesterday at Rs. 184.55/70 against its previous day’s closing of Rs. 184.60/80.

The total USD/LKR traded volume for 5 October was $ 102.98 million.

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