Steady progress at weekly bill auction continues

Thursday, 3 September 2020 01:15 - - {{hitsCtrl.values.hits}}

Secondary bond market activity increases as yields dip

By Wealth Trust Securities

The weekly Treasury bill auction conducted yesterday recorded a steady outcome once again as the total offered amount of Rs.40 billion was all but fully subscribed for a third consecutive week. The weighted average yield on the market favourite 364 day bill remained steady at 4.89% while weighted average yields on the 91 day and 182 day bills decreased by 04 and 01 basis points respectively to 4.52% and 4.67%. The bids to offer ratio decreased to 1.62:1.

The secondary bond market became active yesterday with yields declining on the back of renewed buying interest. The liquid maturities of 2022s (i.e. 15.11.22 & 15.12.22), 2023s (i.e. 15.01.23, 15.07.23 & 01.09.23), 15.09.24 and 15.08.27 saw its yields dip to intraday lows of 5.48%, 5.46%, 5.47%, 5.75%, 5.76%, 6.05% and 6.85% respectively against its previous day’s closing level of 5.50/55 each, 5.57/60, 5.75/80, 5.78/85, 6.05/12 and 6.90/92. Furthermore, the 15.03.23 & 15.10.27 maturities were seen changing hands at levels of 5.60% and 6.87% to 6.95% respectively. In the secondary bill market, October 2020, February 2021, March 2021 and August 2021 maturities were traded at levels of 4.52%, 4.675%, 4.6% and 4.83% respectively, pre-auction.

The total secondary market Treasury bond/bill transacted volumes for 31 August was Rs. 4.42 billion.

In the money market, the overnight surplus liquidity of Rs. 187.16 billion saw weighted average rates on overnight call money and Repo’s remaining steady at 4.53% and 4.54% respectively yesterday.

LKR appreciates further

In the Forex market, USD/LKR rate on spot contracts was seen appreciating further yesterday to hit a high of Rs. 185.05 against its previous day’s closing level of Rs. 185.80/95 on the back of selling interest. It closed the day at Rs. 185.25/35.

The total USD/LKR traded volume for 31 August was $ 77.47 million.

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

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