Outcome of Treasury bond auctions leads to secondary market yields increasing further

Wednesday, 8 April 2015 00:25 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities The outcome of yesterday’s Treasury bond auctions, at where the weighted average (W.Avg) on the two-year duration was recorded at 8.14%, led to secondary market bond yields increasing for a second consecutive day. However, the W.Avg on the six year maturity of 01.08.2021 was seen decreasing by 15 basis points to 9.40% against its previous W.Avg. The total amount of Rs. 20 billion on offer was accepted at the auction. Once again, activity in secondary bond markets centered on the 15.05.

2017, 01.06.2018, 15.09.2019 and 01.08.2021 maturities from daily lows of 7.95%, 8.60%, 8.95% and 9.25% respectively in morning hours of trading leading to the auctions to highs of 8.10%, 8.70%, 9.05% and 9.38% following the outcome of the auctions. In addition, a limited amount of activity was witnessed on the 01.07.2022 and the 01.09.2023 maturities within the range of 9.00% to 9.05% and 9.72% to 9.75% respectively. Meanwhile, at today’s Treasury bill auction, a total amount of Rs. 24 billion will be on offer which will consist of Rs.3 billion, Rs. 10 billion and Rs. 11 billion on the 91 day, 182 day and the 364 day maturities respectively. At last week’s auction, weighted averages declined by 05, 02 and 04 basis points respectively to 6.55%, 6.68% and 6.76%. Meanwhile, in money markets, overnight call money and repo rates remained mostly unchanged to average 6.70% and 6.56% respectively despite surplus liquidity decreasing to Rs 39.90 billion yesterday. Rupee continues appreciating trend for a third consecutive day The rupee on one week forward contracts appreciated further yesterday to close the day at Rs.133.15/25 against its previous day’s closings of Rs. 133.33/38 on the back of continued remittances and export conversions. The total USD/LKR traded volume for 6 April 2015 was at $ 58.80 million. Some of forward USD/LKR rates that prevailed in the market were 1 Month - 133.65; 3 Months - 134.73 and 6 Months - 136.30.