Primary bond rates decreases further

Friday, 29 December 2017 00:00 -     - {{hitsCtrl.values.hits}}

By Wealth 

Trust Securities

The weighted averages at yesterday’s Treasury bond auctions were seen decreasing considerably in comparison to its previously recorded averages on similar maturities. 

The 2.11 year maturity of 15.12.20 recorded a decrease of 37 basis points to 9.55% in comparison to the previous auction held on 30 October 2017 for 01.05.20 maturity. The weighted average of the 8.05 year maturity of 01.06.26 recorded a yield of 10.06% against a weighted average yield of 10.36% reported on the 15.06.27 maturity at the auction conducted on 29 November 2017. The total accepted amount was Rs. 30 billion, exactly in line with the total offered amount of Rs. 30 billion. 

In the secondary bond market, yields were seen decreasing, leading up to the auction, with the liquid maturities of 01.08.26, 15.06.27 and the 15.05.30 maturity dipping to intraday lows of 10.02%, 10.05% and 10.40% respectively. The Central Bank of Sri Lanka kept its policy rates unchanged at 7.25% and 8.75% at its eighth and last monetory policy announcement yesterday. The total secondary market Treasury bond/bill transacted volumes for 27 December 2017 was Rs. 4.1 billion.

In the money market, overnight call money and repo rates remained mostly unchanged to average 8.16% and 7.52% respectively as the net liquidity surplus in the system stood at Rs. 13.43 billion yesterday. 

The OMO Department of the Central Bank of Sri Lanka drained out an amount of Rs. 13.85 billion at a weighted average of 7.25% by way of an overnight repo auction. The Central Bank of Sri Lanka’s (CBSL) Treasury bill holding was seen decreasing once again to a low of Rs. 10.19 billion in book value terms yesterday against its previous day’s figure of Rs. 90.06 billion.

Rupee loses

The USD/LKR rate on spot contracts was seen depreciating yesterday for the first time in six days to close the day at Rs. 153.40/60 against its previous day’s closing levels of Rs. 152.40/55, subsequent to trading at a high of Rs. 152.62 to a low of Rs. 153.50. The total USD/LKR traded volume for 27 December 2017 was $ 71.00 million.

Some of the forward USD/LKR rates that prevailed in the market were one month - 154.45/75; three months - 156.00/15 and six months - 158.80/00.