Bond yields increase ahead of weekly bill auction

Wednesday, 13 February 2019 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The secondary bond market reactivated itself yesterday as yields were seen increasing across the yield curve on the back of foreign and local selling interest. The yields on the medium term liquid maturities of 01.08.26 and 15.06.27 were seen increasing to intraday highs of 11.37% and 11.40% respectively against its previous day’s closing levels of 11.20/27 and 11.33/37 while the short term maturities of 2021’s (01.08.21 & 15.12.21) and 15.12.23 increased to daily highs of 11.08%, 11.02% and 11.10% respectively against its days opening low of 11.00% each.

In addition, the 15.03.25, 01.06.26 and 15.01.27 maturities were seen changing hands at levels of 11.25% to 11.30%, 11.30% and 11.32% to 11.33% respectively as well.

At today’s weekly Treasury bill auction, a total amount of Rs. 21 billion will be on offer consisting of Rs. 3.5 billion each on the 91-day and 182-day maturities and further Rs. 14 billion on the 364-day bill maturity. At last week’s auction, the weighted averages on the 91-day, 182-day and 364-day maturities stood at 9.55%, 9.87% and 10.69% respectively.

The total secondary market Treasury bond/bill transacted volumes for 11 February was Rs. 139 million.

In the money market, the OMO Department of Central Bank infused liquidity by way of an overnight and a six-day term reverse repo auction for successful amounts of Rs. 15 billion and Rs. 10.15 billion at weighted average yields of 8.96% and 8.93% respectively as the overnight net liquidity shortfall stood at Rs. 74.46 billion yesterday.

Rupee loses marginally

The USD/LKR rate on spot contracts depreciated marginally to close the day at levels of Rs. 178.30/40 against its previous day’s closing levels of Rs. 177.80/95 on the back of buying interest by banks.

The total USD/LKR traded volume for 11 February was $ 80.19 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 Month – 179.15/35; 3 Months – 181.05/35 and 6 Months – 184.00/40.