Treasury bond weighted average yields spike

Thursday, 29 March 2018 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The weighted average yields at yesterday’s (28 March) Treasury bond auction increased considerably, with the 04.11 year maturity of 15.03.2023 and the 10.05 year maturity of 01.09.2028 recording weighted average yields of 10.68% and 11.18% respectively, when compared against 9.85% and 10.34% recorded for the maturities of 01.03.2021 and 01.08.2025, at the auction conducted on 26 February. This was the first auction conducted in line with the new Inland Revenue Act, which excludes the 10.00 % With Holding Tax. Yesterday’s auction drew Rs. 80.00 billion in successful bids against a total offered amount of Rs. 80 billion, ahead of an Rs. 92.4 billion Treasury bond maturity due on 1 April. The upward trend in secondary market bond yields too continued yesterday, with the maturities of 01.03.21, 15.12.21 and 01.08.24 hitting intraday highs of 10.03%, 10.09%, and 10.39% respectively, during the pre-auction session.

The total secondary market Treasury bond/bill transacted volumes for 27 March was Rs. 11.26 billion. In money markets, the overnight call money and repo rates remained mostly unchanged to average at 8.14% and 7.66% with no Open Market Operations (OMO) being conducted. The net surplus liquidity in the system decreased to Rs. 6.09 billion.

Rupee appreciates considerably

The USD/LKR rate on spot contracts appreciated considerably yesterday to close the day at Rs. 155.55/65 against its previous day’s closing of Rs. 156.00/05 on the back of forward selling interest by banks. The total USD/LKR traded volume for 28 March was US $ 127.05 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 Month - 156.30/40; 3 Months - 157.85/95 and 6 Months - 160.25/35.