Long tenure bond yields continue to dip ahead of weekly auction

Wednesday, 4 May 2016 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The continued buying interest, mainly on the long end of the curve saw its yields dip yesterday in ahead of today’s weekly Treasury bill auction. The liquid maturities of 01.06.2026, 01.09.2028 and 15.05.2030 saw its yields dip to intraday lows of 11.89%, 12.10% and 12.20% respectively against its days opening highs of 11.95%, 12.15% and 12.26%. In addition on the short end of the curve, 2018 maturities (i.e. 01.02.18, 01.04.18 & 15.11.18) continued to change hands within the range of 11.00% to 11.20% while the 01.05.2020 changed hands within the range of 11.35% to 11.38%.

This was ahead of today’s weekly Treasury bill auction, where a total amount of Rs.35 billion will be on offer consisting of Rs.10 billion each on the 91 day and 364 day maturities and a further Rs.15 billion on the 182 day maturity. At last week’s auction, weighted averages remained unchanged to average 8.45%, 9.53% and 10.17% respectively.

Meanwhile in money markets, the injection of liquidity for the first time in six days by way of a reverse repo auction amounting to Rs.10 billion at a weighted average rate of 7.92% by the Open Market Operations (OMO) department of Central Bank saw the weighted averages on overnight call money and repo rates remaining at 8.15% and 7.09% respectively yesterday. The liquidity in the system stood at a net deficit of Rs.9.71 billion with a further amount of Rs.9.95 billion been accessed from the Standard Lending facility rate of 8.00% (SLFR) against a deposit amount of Rs.10.24 Billion at its Standing Deposit Facility Rate (SDFR) of 6.50%.

Rupee remains

mostly unchanged

Meanwhile in Forex markets yesterday, the USD/LKR rate on the active spot next contract remained mostly unchanged to close the day at Rs.146.00/20. The total USD/LKR traded volume for the 29th of April 2016 was US $ 72.75 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 Month - 146.85/05; 3 Months - 148.55/85 and 6 Months - 150.90/15.