- Bond yields steady ahead of T-bond auctions
By Wealth Trust Securities
The weekly Treasury bill auction conducted yesterday saw a total amount of Rs. 16.8 billion being accepted against its total offered amount of Rs. 42.50 billion, resulting in a shortfall of Rs. 25.69 billion. The weighted average rate on the 364-day maturity was recorded at its stipulated cut-off rate of 5.09%, while weighted average rates on the 91-day and 182-day maturities increased by eight and six basis points respectively to 4.90% and 4.99%. The bids-to-offer ratio decreased to 1.32:1.
Activity in the secondary bond market picked up yesterday while trading within a narrow range ahead of today’s Treasury bond auctions. Trades were witnessed on the maturities of 01.10.22, 15.03.23, 15.12.23, 01.01.24, other 2024’s (i.e., 15.09.24 and 01.12.24) and 01.02.26 at levels of 5.78% to 5.80%, 5.97%, 6.37% to 6.40%, 6.48%, 6.65% to 6.73% and 7.14% respectively. In the secondary bill market, 21 May and 20 August maturities changed hands at a level of 4.84% and 4.98% respectively, pre-auction.
The T-Bond auctions will see in total an amount of Rs. 125 billion on offer in lieu of a Rs. 109.12 billion maturity due on 1 March, which will be consisting of Rs. 25 billion of a new 15.11.2023, Rs. 30 billion each of the 15.09.2024 and 15.01.2026 and a further Rs. 40 billion of 01.07.2028. Maximum yield rates for acceptance were published as 6.25%, 6.70%, 7.10% and 7.60% respectively. The weighted average yields at the bond auctions conducted on 27 January for the maturities of 01.12.2024 and 15.08.2027 were recorded at 6.34% and 7.16% respectively.
The total secondary market Treasury bond/bill transacted volumes for 22 February was Rs. 3.85 billion.
In the money market, weighted average rates on call money and repo was registered at 4.54% and 4.56% respectively, while the overnight surplus liquidity was recorded at Rs. 169.66 billion yesterday.
In Forex markets, the USD/LKR rate on spot contracts was seen closing the day at Rs. 194.00/194.50 yesterday, against its previous day’s closing level of Rs. 193.50/194.25 subsequent to trading within a range of Rs. 194.00 to Rs.194.25.
The total USD/LKR traded volume for 22 February was $ 73.00 million.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)