Bond markets remain subdued ahead of weekly Treasury bill auction

Wednesday, 27 November 2013 00:20 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities The secondary bond market continued to be subdued yesterday as well with active two way quotes mainly seen on the 01.01.2017 and two liquid five-year maturities (i.e. 01.04.2018 and 15.08.2018) at levels of 10.80/83, 11.11/14 and 11.22/25 respectively. In addition, on the shorter end of the yield curve, the two year maturity was seen quoted at levels of 10.03/08 and the three year at 10.42/44 as well. At today’s weekly Treasury bill auction, the total offered amount is increased to a fifteen week high of Rs. 11.0 billion which will consist of Rs. 0.5 billion, Rs. 1.0 billion and Rs. 9.5 billion on the 91-day, 182-day and the 364-day maturities respectively. At last week’s auction, the weighted averages on all three maturities declined for a 9th consecutive week to 8.10%, 8.85% and 9.75% respectively. Meanwhile in secondary bill markets, April 2014 maturities were seen changing hands within the range of 8.60% to 8.65%, May 2014 within 8.75% to 8.85%, August 2014 within 9.35% to 9.40% and the October 2014 within 9.55% to 9.60% reflecting continued demand. In money markets, the Open Market Operations (OMO) department of Central Bank was seen mopping up liquidity on a seven day basis for an amount of Rs. 7.0 billion at a weighted average of 7.44% while a further Rs. 4.16 billion was deposited at its widow rate of 6.50%. This in turn saw overnight call money and repo rates remain steady to average 7.77% and 7.06% respectively despite surplus liquidity in money market decreasing marginally to Rs. 11.16 billion yesterday. Rupee on spot contracts dip for the first time in two weeks In USD/LKR markets, rupee on-spot contracts lost grounds marginally yesterday for the first time in two weeks to a daily low of Rs. 131.15 from its previous day’s closing level of Rs. 131.10 while spot next contracts lost ground as well to a low of Rs. 131.40 against its previous closing levels of Rs. 131.23/26 on the back of importer demand. The total USD/LKR traded volume for the previous day (25-11-13) stood at $ 48.43 million. Some of the forward dollar rates that prevailed in the market were 1-Month: Rs. 132.08; 3-Months: Rs. 133.68 and 6-Months: Rs. 135.93.