Bond yields continue to hold steady ahead of weekly bills auction

By Wealth Trust Securities

Secondary bond market yields continue to remain broadly steady yesterday ahead of the weekly Treasury bills auction due today.  Limited trades were witnessed on the maturities of 1.5.20, 1.8.21, 1.10.22, three 2023s (i.e. 15.3.23, 15.5.23 and 15.7.23), four 2024s (i.e. 1.1.24, 15.6.24, 1.8.24 and 15.9.24), 15.3.25, two 2026s (i.e. 1.6.26 and 1.8.26) and 1.9.28 at levels of 7.88%, 8.83%, 9.10%, 9.50% to 9.65%, 9.87% to 10.00%, 10.07% to 10.08%, 10.10% to 10.22% and 10.26% respectively. Today’s auction will have on offer a total amount of Rs. 23.5 billion, consisting of Rs. 1 billion of the 91 day, Rs. 7.5 billion of the 182 day and Rs. 15 billion of the 364 day maturities. At last week’s auction, the 364 day bill weighted average increased by seven basis points to 8.29% while the 182 day bill weighted average increased by nine basis points to 7.67%.  

The weighted average on the 91 day bill decreased by two basis points to 7.45%. In the secondary Treasury bill market, January and November 2020 bills were seen changing hands at levels of 7.30% and 8.33% to 8.37% respectively.

The total secondary market Treasury bond transacted volume for 2 December 2019 was Rs. 10.58 billion. In money markets, the overnight call money and repo rates averaged 7.50% and 7.54% respectively as the Open Market Operations (OMO) Department of the Central Bank of Sri Lanka injected an amount of Rs. 10 billion on an overnight basis by way of a Reverse Repo auction at a weighted average of 7.51%. The net liquidity overnight surplus increased to Rs. 21.41 billion yesterday.

 LKR loses further

In the Forex market, the USD/LKR rate on spot contracts was seen depreciating further to close the day at Rs. 181.50/60 against its previous day’s closing levels of Rs. 181.15/30 on the back of continued buying interest by banks.

The total USD/LKR traded volume for 2 November 2019 was $ 55.99 million.Some of the forward USD/LKR rates that prevailed in the market were one month - 181.95/15; three months - 182.85/15 and six months - 184.70/10.