Bond yields remain broadly steady ahead of weekly bill auction

Wednesday, 18 September 2019 00:00 - - {{hitsCtrl.values.hits}}

46-week low volume on offer at auction

By Wealth Trust Securities

The yields in the secondary bond market were seen closing the day broadly steady yesterday ahead of today’s weekly Treasury bills auction. Activity remained moderate with limited trades seen on the 15.07.23, two 2024’s (i.e15.06.24 & 15.09.24), 15.06.27 and 15.09.34 maturities at yields of 10.00%, 10.30%, 10.30% to 10.38%, 10.71% to 10.76% and 10.96% to 10.98% respectively.

Today’s bill auction will have on offer a 46 week low total volume of Rs. 8.5 billion, consisting of Rs. 2 billion on the 91 day, Rs. 1 billion on the 182 day and a further Rs. 5.5 billion of the 364 day maturities. At last week’s auction, the weighted averages on the 182 day and 364 day maturities increased to 7.75% and 8.36% respectively while the weighted average on the 91 day bill decreased to 7.61%. In the secondary bill market, January, February, May and September 2020 maturities were traded at 7.85%, 7.90%, 8.30% and 8.32% respectively. The total secondary market Treasury bond/bill transacted volumes for 16 September was Rs. 5.15 billion.

In money markets yesterday, the overnight call money and repo rates averaged 7.47% and 7.55% respectively as the overnight net liquidity surplus in the system increased to Rs. 13.13 billion. The Open Market Operations (OMO) Department of the Central Bank of Sri Lanka was seen injecting amounts of Rs. 5.7 billion, Rs. 6.0 billion and Rs. 2.4 billion respectively on an overnight, 7 day and 14 day basis by way of Reverse Repo auctions at weighted average rates of 7.43% each and 7.45%. It further injected an amount of Rs. 5.0 billion for Standalone Primary Dealers by way of an overnight reverse repo auction at a weighted average rate of 7.55%.

Rupee dips

The USD/LKR rate on spot contracts was seen depreciating to close the day at Rs. 180.55/65 against its previous day’s closing of Rs. 180.48/55 on the back of buying interest by banks. The total USD/LKR traded volume for 16 September was $ 64.80 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 month - 181.05/25; 3 months - 182.05/35 and 6 months - 183.80/20.