Secondary market bond yields continue to increase ahead of weekly auction
Wednesday, 6 November 2013 00:00
By Wealth Trust Securities
The secondary market Treasury bond yields continued its increasing trend for a fifth consecutive day yesterday ahead of today’s weekly Treasury bill auction.
At today’s auction, the total offered amount is reduced to a five week low of Rs. 8 billion with Rs. 0.5 b each on the 91 day and 182 day maturities and Rs. 7 b on the market favorite 364 day maturity.
At last week’s auction, the 364 day bill reflected a sharp decline of 19 basis points to a 21-month low of 9.83% while the 182 day bill dipped by 11 basis points to 9.00%. However, all bids received for the 91 day bill was rejected for a second consecutive week.
Secondary bond markets
In secondary bond markets, activity continued to center the liquid two five year maturities (i.e. 1 April 2018 and 15 August 2018) and the 1 January 2017 maturity as selling interest saw its yields increase to a two week high of 11.06%, 11.10% and 10.88% respectively from its opening levels of 10.92/94, 10.97/00 and 10.75/80. However, buying interest towards the latter part of the day saw yields edge down once again to close the day at 10.99/02, 11.06/10 and 10.83/88 respectively. In addition, the 364 day bill was seen changing hands at 9.80% while May 2014 bills were seen changing hands within the range of 8.95% to 9.05% in secondary markets.
Meanwhile in money markets, surplus liquidity decreased to Rs. 12.62 b yesterday with an amount of Rs. 10 b being drained out by way of a seven day Repo auction at a WAvg of 7.46%. A further amount of Rs. 2.62 billion was seen been deposited at Central Bank’s repo window of 6.50% which intern helped overnight call money and repo rates remain steady to average 7.76% and 7.05% respectively.
Rupee remains steady
In Forex markets the USD/LKR rate remained steady to close the day at levels of Rs. 131.10/15. The total USD/LKR traded volume for the previous day (4 November 2013) stood at US$ 65.73 million.
Some forward dollar rates that prevailed in the market were: one month – 131.95; three months – 133.53; and six months – 135.73.