Bond yields increase marginally ahead of weekly bill auction

Tuesday, 7 January 2020 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The fresh trading week saw secondary bond market yields increasing marginally yesterday, on the back of selling interest ahead of today’s weekly Treasury bill auction.

The maturities of 15.03.23, 2024’s (i.e. 15.03.24, 15.06.24 and 15.09.24) and 2027’s (i.e. 15.06.27 and 15.10.27) were seen hitting intraday highs of 9.20%, 9.55%, 9.67%, 9.63% and 9.82% each respectively against its previous day’s closing levels of 9.15/25, 9.48/55, 9.55/58 each, 9.70/80 and 9.75/80.

Today’s bill auction, conducted one day ahead due to a shortened trading week, will have on offer a total amount of Rs. 25 billion, consisting of Rs. 2 billion on the 91 day, Rs. 7 billion on the 182 day and Rs. 16 billion on the 364 day maturities. At last week’s auction, weighted average yields of the 182 and 364 day maturities remained steady at 8.02% and 8.45% respectively while all bids received on the 91 day maturity were rejected.

The total secondary market Treasury bond/bill transacted volume for 3 January 2020 was Rs. 9.5 billion.

In money markets, overnight call money and repo rates averaged 7.48% and 7.52% respectively as the Open Market Operations (OMO) Department of the Central Bank of Sri Lanka was seen injecting an amount of Rs. 2.55 billion at a weighted average of 7.50% by way of an overnight reverse repo auction. The overnight net liquidity surplus in the system stood at Rs. 37.89 billion yesterday.

Rupee loses marginally

In the Forex market, the USD/LKR rate on spot contracts was seen depreciating yesterday to close the day at Rs. 181.30/40 against its previous day’s closing levels of Rs. 181.25/35 on the back of buying interest by banks.

The total USD/LKR traded volume for 3 January 2020 was $ 96.51 million.

Some of the forward USD/LKR rates that prevailed in the market were one month - 181.85/00; three months - 182.85/05 and six months - 184.45/75.