Primary auction WAvg’s dip ahead of monetary policy meeting

Tuesday, 15 October 2013 00:10 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities The high demand for shorter tenure maturities in secondary markets reflected favourably once again on weighted averages (WAvgs) at yesterday’s weekly Treasury bill auction as it continued its downward trend. The WAvg on the 91-day dipped by 2 basis points (bp) to 8.56% while the 182-day and 364-day WAvg’s dipped by 1 bp each to 9.60% and 10.49% respectively. The market favourite 364-day bill continued to dominate the auction as it represented 88% of the total accepted amount, which was Rs. 2 billion more than its initial offered amount of Rs. 9 billion. Activity in secondary bond markets moderated towards the latter part of the day yesterday ahead of today’s monetary policy announcement for the month of October. The liquid two maturities (i.e. 1 January 2017 and 1 April 2018) were seen trading within a

tight range of 11.19% to 11.23% and 11.35% to 11.37% respectively against their last week’s closing levels of 11.20/25 and 11.36/38 respectively. In addition, the two-year maturity of 15 July 2015 was seen quoted at levels of 10.65% to 10.72% while the 364-day bill was seen

changing hands within the range of 10.43% to 10.46% in secondary markets as well. Overnight call money and repo rates remained steady to average 8.30% and 7.61% respectively as surplus liquidity stood at Rs. 13.53 billion. The Open Market Operations (OMO) department of Central Bank was seen mopping up an amount of Rs. 8.84 billion for a period of seven days at a weighted average of 7.97% by way of a repo auction, while a further amount of Rs. 4.69 billion was seen been deposited at CBSL’s repo window of 7.00%. Rupee gains below Rs. 130 for the first time in three months Selling interest on forward dollar contracts saw the rupee gain ground once again yesterday to levels of Rs. 130.85/90 against its Friday’s closing levels of Rs. 131.07/10. The total USD/LKR traded volume for the previous day (10 October 2013) stood at $ 49.68 million.

Some of the forward dollar rates that prevailed in the market were 1-Month: Rs. 131.79, 3-Months: Rs. 133.43 and 6-Months: Rs. 135.88.