Bond yields decrease marginally ahead of weekly bill auction

Wednesday, 24 January 2018 00:13 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The secondary market bond yields decreased marginally yesterday on thin volumes ahead of today’s weekly Treasury bill auction.

Foreign and local buying interest of the 01.08.21 and 01.08.26 maturities resulted in their yields decreasing to daily lows of 9.31% and 9.70% respectively, against its previous day’s closing levels of 9.35/37 and 9.73/78 while the 15.10.18, 01.03.21 and 01.06.26 maturities changed hands at levels of 8.50%, 9.30% and 9.75% respectively. At today’s bill auction, the total offered amount will increase to an eight week high of Rs. 26.5 billion consisting of Rs. 12 billion and Rs. 14.5 billion on the 182 day and 364 day maturities. At last week’s auction, the weighted average yield of the 364 day bill increased by five basis points to 8.85%, while the 182 day maturity decreased by nine basis points to 7.97%.

The total secondary market Treasury bond/bill transacted volumes for 22 January 2018 was Rs. 3.3 billion.

Meanwhile, in money markets, the OMO Department of the Central Bank of Sri Lanka was seen draining out in total an amount of Rs. 3.8 billion by way of two outright sales of Treasury bills at weighted average rates of 7.57% and 7.84% for 58 and 114 days respectively.

Net surplus liquidity in the system stood at Rs. 13.60 billion with a further amount of Rs. 10 billion being drained out at a weighted average of 7.25%, by way of an overnight repo auction.

This in turn saw the yields of overnight call money and repo rates averaging at 8.15% and 7.61% respectively.

Rupee losses further

In the Forex market, the USD/LKR spot rate was seen losing marginally yesterday, to close the day at Rs. 154.10/20 against its previous day’s closing level of Rs. 154.05/10 on the back of continued importer demand. The total USD/LKR traded volume for 22 January 2017 was $ 92.25 million.

Some of the forward USD/LKR rates that prevailed in the market were one month - 154.90/00; three months - 156.45/60 and six months - 158.80/95.