Bond yields decrease ahead of weekly bill auction

Wednesday, 9 September 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 bills auction. Buying interest on the 2022s (i.e. 15.11.22 & 15.12.22), 2023s (i.e. 15.01.23 & 15.07.23), 15.09.24, 01.05.25, 01.02.26 and 2027s (i.e. 15.08.27 & 15.10.27) saw its yields decrease to 5.50%, 5.52%, 5.55%, 5.75%, 6.05%, 6.34%, 6.50%, 6.88% and 6.95% respectively against its previous day’s closing levels of 5.50/58, 5.55/60, 5.58/65, 5.75/85, 6.06/08, 6.35/37, 6.50/55, 6.90/98 and 6.92/00. In addition, the shorter end maturities of 01.03.21 and 01.05.21 changed hands at levels of 4.65% and 4.75% respectively.

Today’s auction will have on offer a total amount of Rs. 40 billion, consisting of Rs. 10 billion of the 91 day, Rs. 12 billion of the 182 day and Rs. 18 billion of the 364 day maturities. At last week’s auction, the weighted average rates on the 91 day and 182 day maturities decreased by 04 and 01 basis points respectively to 4.52% and 4.67% while the weighted average rate on the 364 day maturity remained steady at 4.89%. The same weighted average rates were announced as the stipulated cut offs for today’s auction. In the secondary bill market, the October 2020 maturities were seen changing hands at 4.55%.

The total secondary market Treasury bond/bill transacted volumes for 7 September was Rs. 6.07 billion.

In the money market yesterday, Overnight Surplus liquidity along with weighted average rates on overnight call money and Repos were recorded at Rs. 189.03 billion, 4.53% and 4.54% respectively.

LKR appreciates further

In the Forex market, USD/LKR rate on spot contracts was seen appreciating further to close the day at Rs. 184.30/40 against its previous day’s closing level of Rs. 185.65/80 on the back of continued selling interest.

The total USD/LKR traded volume for 7 September was $ 86.32 million.

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