Bond market remains dull ahead of weekly bill auction

Wednesday, 19 October 2016 00:01 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

Activity in the secondary bond market continued to remain dull yesterday ahead of today’s weekly Treasury bills auction.

A limited amount of trades were witnessed on the 2018 maturities (i.e. 15.10.18 and 15.11.18), the 01.05.20 and the 01.08.26 maturity within the range 11.00% to 11.10%, 11.63% to 11.66% and 12.00% respectively while in secondary bill markets, durations centering the 182 day and 364 day maturities were traded within the range of 9.60% to 9.70% and 10.15% to 10.25% respectively.

At today’s weekly bill auction, a total amount of Rs. 24 billion will be on offer consisting of Rs. 8 billion each on the 91 day, 182 day and 364 day maturities. At last week’s auction, all bids received were rejected for the first time in thirty weeks. Given below are the closing, secondary market yields for the most frequently traded maturities.

In the money market, the overnight repo rate decreased further to average 8.71% as the Open Market Operations (OMO) Department of Central Bank continued to inject an amount of Rs. 48.00 billion on an overnight basis at a weighted average of 8.49% by way of an overnight reverse repo auction.

The net liquidity shortfall in the system decreased to Rs. 44.23 billion.

Rupee dips once again

Meanwhile in Forex markets, the active spot next contract depreciated yesterday to close the day at Rs. 147.27/35 against its previous day’s closing level of Rs. 147.00/05. The total USD/LKR traded volume for the 17 October 2016 was $ 49.06 million. Given below are some forward USD/LKR rates that prevailed in the market.

1 Month - 148.10/15

3 Months - 149.80/90

6 Months - 152.25/35

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