Positive momentum in primary auctions continues

By Wealth Trust Securities

The positive momentum in primary auctions continued even at yesterday’s Treasury bond auctions as it recorded impressive weighted averages while the total offered amount of Rs. 35 billion was fully subscribed. The 2 year and 06 months maturity of 15.12.2022 recorded a weighted average of 7.75%, equal to its pre-auction rate of 7.72/75, but well below its stipulated cut off rate of 7.85%. 

The 05 year and 8 months maturity of 01.02.2026 fetched a weighted average of 8.59% against its pre-auction rate of 8.55/65 for a similar maturity and just below its stipulated cut off rate of 8.60% while its offered amount of Rs. 15 billion was fully accepted at its phase II due to a shortfall of Rs. 0.2 billion at its phase I. 

The secondary bond market remained active yesterday, with yields decreasing on the back of continued buying interest. 

The liquid maturities of 15.12.22, 15.01.23, 2024s (i.e. 01.01.24, 15.03.24, 15.06.24 & 15.09.24), 01.05.25 and 15.10.27 saw its yields dip to intraday lows of 7.66%, 7.71%, 8.05%, 8.10%, 8.25%, 8.24%, 8.40% and 8.74% respectively in comparison to its previous day’s closing levels of 7.73/78, 7.75/80, 8.10/15, 8.15/25, 8.30/32, 8.32/34, 8.45/50 and 8.80/85 recorded the previous day. 

In addition, maturities of 01.08.25 and 15.05.30 changed hands at levels of 8.45% and 8.93% respectively.

In the secondary bill market, June 2020, August 2020 and January 2021 maturities changed hands at 6.52%, 6.57% to 6.59% and 6.84% respectively.

The total secondary market Treasury bond/bill transacted volume for 10 June was Rs. 19.55 billion. 

In money markets, the DOD (Domestic Operations Department) of Central Bank refrained from conducting any auctions for a fifth consecutive day as the overnight net liquidity surplus in the system increased to Rs. 109.61 billion yesterday. The weighted average rates of overnight call money and repo stood at 5.75% and 5.89% respectively.

Rupee remains mostly unchanged 

In Forex markets, the spot rate was seen closing broadly steady yesterday at Rs. 185.15/25 against its previous day’s closing levels of Rs. 185.20/30 on the back of an equilibrium market.

The total USD/LKR traded volume for 10 June was $ 100.52 million. 

 (References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)