Bond yields increase ahead of weekly bills auction

Tuesday, 4 June 2019 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The secondary bond market yields increased yesterday on the back of selling interest, mainly on the liquid short to belly end maturities of 15.10.21, 15.12.21, 15.03.24, 01.08.26 and 15.01.27 to intraday highs of 9.60%, 9.60%, 10.15%, 10.50% and 10.58% respectively against its previous day’s closing levels of 9.35/40, 9.40/50, 9.98/00, 10.25/32 & 10.37/40. Furthermore, a limited amount of activity was witnessed on the 01.05.20, two 2021’s (i.e. 01.03.21 & 01.08.21), 15.03.22, 15.07.23, 15.06.27 and 01.05.29 maturities at levels of 8.90%, 9.40% to 9.53%, 9.75%, 9.95%, 10.45% to 10.52% and 10.50% to 10.57% respectively as well while the 01 year bill traded at 8.90%.At today’s Treasury bill auction, conducted a day earlier due to a mid-week holiday, a total amount of Rs. 20 billion will be on offer, consisting of Rs. 2 billion on the 91 day, Rs. 4 billion on the 182 day and Rs. 14 billion on the 364 day maturities.

At last week’s auction, the weighted average yields of the 182 day and 364 day bills declined to 8.63% and 9.88% respectively while all bids received on the 91 day bill were rejected.The total secondary market Treasury bond/bill transacted volumes for 31 May was Rs. 12.69 billion.

In the money market, the overnight call money and repo rates averaged 7.97% and 8.11% respectively as the OMO department of Sri Lanka drained out an amount of Rs. 25.00 billion on an overnight basis by way of a repo auction at a weighted average of 7.94%. Further, an amount of Rs. 26.20 Billion was mopped up for 8 days at a weighted average of 8.04% as the net surplus overnight liquidity increased Rs. 43.20 billion yesterday.

Rupee loses marginally

In the Forex market, the USD/LKR rate on the spot rate depreciated marginally yesterday to close the day at Rs. 176.45/55 against its previous day’s closing levels of Rs. 176.40/50 on the back buying interest from banks.

The total USD/LKR traded volume for 31 May was $ 112.53 million.

Some forward USD/LKR rates that prevailed in the market: 1 month - 177.20/40; 3 months - 178.75/95; 6 months - 181.05/35.