Bond yields mostly unchanged ahead of weekly bill auction

By Wealth Trust Securities

The secondary bond market yields closed broadly unchanged yesterday, with moderate volumes of trades taking place within a narrow band. 

The yields were seen continuing their decreasing trend in the morning hours of trading mainly on the two 2021’s (i.e. 01.03.21 and 01.08.21) maturities to intraday lows of 9.90% and 9.96% respectively. However, selling interest during the latter part of the day saw yields increasing once again to 9.95% and 10.00% respectively, to close the day mostly unchanged against its previous day’s closing levels. 

In addition, the maturities of 01.09.23, 15.03.25 and 15.05.30 were seen changing hands within the range of 10.12% to 10.13%, 10.35% to 10.40% and 10.50% to 10.53% respectively as well. 

In the secondary bill market, the one-year Treasury bill traded within the range of 9.50%-9.60%.

Today’s bill auction will have on offer a total amount of Rs. 30 billion consisting of Rs. 6 billion on the 91 day, Rs. 9 billion on the 182 day and Rs. 15 billion on the 364 day maturities. At last week’s auction, the weighted on the 364 day bill increased to 9.59% while all bids received on the 91 day and 182 day bills were rejected. The total secondary market Treasury bond/bill transacted volumes for 5 March 2018 was Rs. 2.87 billion.

In money markets, the Open Market Operations (OMO) Department of the Central Bank of Sri Lanka was seen draining out an amount of Rs. 16.5 billion by way of two repo auctions at weighted averages of 7.26% and 7.35% respectively for periods of one and seven days as the net surplus liquidity in the system stood at Rs. 30.06 billion yesterday. The overnight call money and repo rates averaged 8.15% and 7.56% respectively.

Rupee dips marginally

The USD/LKR rate on spot contracts was seen depreciating yesterday to close the day at Rs. 155.05/12 against its previous day’s closing level of Rs. 154.95/05 on the back of importer dollar demand.

The total USD/LKR traded volume for 5 March 2018 was $ 122.1 million.

Some of the forward USD/LKR rates that prevailed in the market were one month - 156.00/10; three months - 157.55/65 and six months - 160.00/10.