Bond yields decrease marginally ahead of weekly bill auction

Wednesday, 31 October 2018 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

Secondary bond market yields decreased marginally yesterday ahead of today’s weekly Treasury bill auction.

Buying interest on the 15.09.19, 01.05.20, 15.07.23 and 01.08.24 maturities saw its yields dip to intraday lows of 10.70%, 10.95%, 11.33% and 11.40% respectively against its opening highs of 11.00%, 11.05%, 11.45% and 11.50% amidst foreign selling.

A total amount of Rs.13 billion will be on offer at today’s Treasury bill auction, consisting Rs.3 billion on the 91-day maturity and Rs. 10 billion on the 364-day maturity. At last week’s auction, the weighted average yield of the 364-day bill decreased by five basis points for the first time in five auctions to 10.39% while all bids received for the 182 day maturity were rejected.

The total secondary market Treasury bond/bill transacted volume for 29 October 2018 was Rs. 18.18 billion.

Given below are the closing, secondary market yields of the most frequently traded T-bills and bonds.

In the money market, the OMO department of the Central Bank was seen infusing liquidity by way of an overnight and six-day term repo auction for successful amounts of Rs. 20.00 billion each at weighted averages of 8.45% and 8.46% respectively as the net liquidity shortfall stood at Rs. 46.62 billion yesterday. The call money and repo rates averaged 8.43% and 8.47% respectively.

Dollar strengthens further

In the Forex market, the downward trend in the rupee value continued as the USD/LKR rate on spot contracts closed lower at Rs.174.50/80 against its previous day’s closing levels of Rs.173.80/00 on the back of importer demand and foreign selling in rupee bonds.

The total USD/LKR traded volume for 29 October was $ 106.80 million.

Given below are some of the forward USD/LKR rates that prevailed in the market.

1 Month - 175.50/80

3 Months - 177.40/80

6 Months - 180.40/90