Yields continue to head south ahead of weekly T-Bill auction

Wednesday, 5 May 2021 00:24 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The positive sentiment in the secondary bond market continued yesterday as well, mainly on the short end of the yield curve on the back of persistent buying interest ahead of today’s weekly Treasury bill auction.

Yields on the liquid maturities of 15.12.22 and 2023’s (i.e. 15.07.23 and 15.11.23) hit intraday lows of 5.80%, 6.32% and 6.45% respectively against its days opening highs of 5.85%, 6.40% and 6.49%. In addition, activity was witnessed on the other 2022’s (i.e. 01.10.22 and 15.11.22), 01.09.23 and three 2026 maturities (i.e. 15.01.26, 01.02.26 and 01.08.26) at levels of 5.80% each, 6.43%, 7.35% each and 7.73% to 7.75% respectively as well. In secondary bills, a July 2021 bill changed hands at 4.93%.

The weekly bill auction due today will see a total amount of Rs.45 billion on offer, consisting of Rs. 11 billion of the 91 day maturity, Rs. 15 billion of the 182 day maturity and Rs. 19 billion of the 364 day maturity. At last week’s auction, the weighted average yields of the 91 day and 182 day maturities increased by 01 basis point each to 5.11% and 5.14% respectively while the weighted average yield of the 364 day maturity remained steady at 5.18%.

The stipulated cut off rate on the 364 day maturity remained steady at 5.18% for a third consecutive week, while the maximum yield rates of the 91 day and 182 day maturities will be decided below the level of the 364 day maturity at the auction.

The total secondary market Treasury bond/bill transacted volume for 3 May was Rs. 9.17 billion.

In money markets, the weighted average rates on call money and repos remained steady at 4.67% and 4.69% respectively as the overnight net surplus liquidity registered Rs. 144.67 billion yesterday.

USD/LKR

In Forex markets, the USD/LKR on 01 month forward contracts was bid at Rs. 199.75 yesterday.

The total USD/LKR traded volume for 3 May was $ 56.35 million.

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