Bond yields decrease further ahead of weekly bill auction

Wednesday, 30 January 2019 00:03 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The secondary bond market yields dipped further yesterday on the back of sustained buying interest.

The liquid maturities of 15.12.23, 01.08.26 and 01.09.28 were seen decreasing further to intraday lows of 11.20%, 11.42% and 11.54% respectively against its previous day’s closing levels 11.32/36, 11.58/63 and 11.63/70.

In addition, maturities consisting of 15.12.21, 15.07.23 and 15.03.25 were seen changing hands at levels of 10.95%, 11.27% to 11.33% and 11.30% to 11.42% respectively as well.

At today’s weekly bill auction, a total amount of Rs. 21 billion will be on offer consisting of Rs. 5 billion of the 182 day and Rs. 16 billion of the 364 day maturities. At last week’s auction, the weighted average yield on the 364 day maturity decreased by 5 basis points to 10.70% while weighted average on the 182 day maturity remained steady at 9.87%.

The total secondary market Treasury bond/bill transacted volumes for 28 January was Rs. 4.8 billion.

In the money market, the overnight call money and repo rates remained steady to average 9.00% as the net liquidity shortfall in the system reduced to Rs. 108.60 billion yesterday. The OMO Department of the Central Bank of Sri Lanka injected an amount of Rs. 40 billion at a weighted average of 9.00%, by way of an overnight reverse repo auction.

Rupee appreciates considerably

The USD/LKR rate on spot contracts was seen appreciating yesterday to close the day at Rs. 180.80/95 against its previous day’s closing of Rs. 181.55/65 on the back of selling interest by banks and export conversions.

The total USD/LKR traded volume for 28 January was $ 102.13 million.

Given are some forward USD/LKR rates that prevailed in the market: one month – 181.70/00; three months – 183.65/95; six months – 186.60/90.