Bond yields decrease ahead of weekly bill auction

Wednesday, 19 August 2020 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The secondary bond market yields were seen decreasing yesterday ahead of today’s weekly Treasury bill auction. Continued buying interest saw yields on the liquid maturities of 2022s (i.e. 15.11.22 and 15.12.22), 2023s (i.e. 15.01.23 and 01.09.23), 15.09.24 and 15.08.27 decreasing to intraday lows of 5.50% each, 5.53%, 5.80%, 6.08% and 6.94% respectively against its previous day’s closing levels of 5.58/62, 5.60/65, 5.65/70, 5.87/90, 6.13/15 and 6.98/02.

In addition, maturities of 2021s (i.e. 01.05.21 and 15.12.21), 15.03.23, 2024s (i.e. 01.01.24, 15.03.24, 15.06.24 & 01.08.24), 01.05.25 and 01.02.26 changed hands at levels of 4.85%, 5.10%, 5.65%, 5.95% to 6.10%, 6.36% to 6.39% and 6.50% respectively.

Today’s Treasury bill auction will have on offer a total amount of Rs. 40 billion, consisting of Rs. 5 billion of the 91 day, Rs. 15 billion of the 182 day and Rs. 20 billion of the 364 day maturities.

At last week’s auction, weighted average rates on the 91 day and 364 day maturities decreased by 2 and 1 basis points respectively to 4.65% and 4.93%, while the weighted average rate on the 182 day bill remained steady at 4.76%. The same weighted average rates were announced as stipulated cut off rates for today’s auction. In secondary bills, October 2020 and January 2021 maturities were seen changing hands at 4.68% and 4.73% respectively.

The total secondary market Treasury bond/bill transacted volumes for 17 August was Rs. 9.17 billion.

In money markets, weighted average rates on overnight call money and repo stood at 4.52% and 4.55% respectively as the net overnight surplus liquidity increased further to Rs. 190.52 billion yesterday.

Rupee loses further

The USD/LKR rate on spot contracts was seen depreciating further to close the day at Rs. 184.30/50 yesterday against its previous day’s closing level of Rs. 183.75/90 on the back of continued buying interest by Banks. The total USD/LKR traded volume for 17 August was $ 59.75 million.

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