Bond market remains dull ahead of Treasury bond auctions

Friday, 11 January 2019 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

Activity in the secondary bond market remained moderate yesterday as most market participants continued to stay on the sidelines ahead of today’s Treasury bond auctions. Limited trades were seen on the maturities of the two 2021’s (i.e. 01.03.21 and 15.12.21) and 15.03.25 at levels of 11.20% to 11.25%, 11.30% to 11.33% and 11.75% to 11.78% respectively.

Today’s Treasury bond auctions, in lieu of a Treasury bond maturity of Rs. 80.7 billion will have in total an amount of Rs. 98 billion, consisting of Rs. 48 billion on a new 4 year and 11 months maturity of 15.12.23, and Rs. 50 billion on a 9 year and 8 months maturity of 01.09.28. The weighted average yields at the auctions conducted on 13 December 2018 for the maturities of 15.12.2021 and 01.08.2026 were recorded at 11.88% and 12.23% respectively.

The total secondary market Treasury bond/bills transacted volume for 9 January was Rs. 10.36 billion.

In the money market, the overnight call money and repo rates averaged 9.00% as the OMO Department of the Central Bank infused liquidity by way of an overnight and a seven day term reverse repo auction for successful amounts of Rs. 15 billion and 10 billion, at weighted average yields of 8.99% and 9.00% respectively. The net liquidity shortfall stood at Rs. 65.93 billion yesterday.

Rupee appreciates further

In the Forex market, the USD/LKR rate on spot contracts appreciated further to close the day at Rs. 181.90/10 against its previous day’s closing levels of Rs. 182.40/50 on the back of continued selling interest by banks.

The total USD/LKR traded volume for 9 January was $ 51.39 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 month - 182 70/10; 3 months - 184.55/95 and 6 months - 187.50/90.