Primary market weekly averages drop for a second consecutive week

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

By Wealth Trust Securities The weighted averages (WAvg) at yesterday’s weekly Treasury bill auction reflected a downward trend for a second consecutive week as total bids received at the auction reached a 10 weeks high of Rs.29.97 Bn.

The drop in WAvgs was two basis points across the board to 8.58%, 9.61% and 10.50% respectively on the 91 day, 182 day and 364 day maturities. Interestingly, the total amount accepted was more than twice the total offered amount of Rs. 10 b while the 364 day maturity continued to dominate the auction as it represented 93% of the total accepted amount of Rs. 21.3 b. In secondary bond markets, yields closed the day lower yesterday against its previous day’s closings on the back of buying interest towards the latter part of the day. The liquid five year maturity was seen changing hands within a daily low of 11.63% to a high of 11.68% while the three and a quarter year maturity was seen been traded at a low of 11.41% to a high of 11.44%. Meanwhile, in secondary bill markets demand prior and post auction saw January 2014 bills change hands within the range of 8.75% to 8.90%,

May 2014 within the range of 9.70% to 9.80%, June 2014 within 10.05% to 10.15% while the latest 364 day bill was quoted at 10.45/49. In money markets, the average overnight call money and repo rates decreased marginally to 8.38% and 7.88% respectively as surplus liquidity increased to Rs. 22.15 b yesterday. Central Bank continued to mop up an amount of Rs. 12.25 billion through its Open Market Operations at a WAvg yield of 7.98% for a period of six days while a further amount of Rs. 9.90 b was deposited at its policy rate of 7.00%. Rupee appreciates marginally Selling interest on forward dollar contracts saw the rupee close the day marginally higher yesterday at Rs. 131.10/13 against its previous day’s closing of Rs. 131.21/23. The total USD/LKR traded volume for the previous day (8 October 2013) stood at US $ 37.01 million. Some of the forward dollar rates that prevailed in the market were one month – 132.01; three months – 133.69; and six months – 136.09.