Secondary market bond yields edge up marginally as policy rates held steady for a fifth consecutive
Thursday, 19 June 2014 00:00
Profit taking saw secondary market bond yields edge up marginally yesterday following the monitory policy announcement for the month of June at where policy rates were held steady for a fifth consecutive month at 6.50% and 8.00% respectively. Activity picked up with a majority of activity surrounding the liquid two 2018 maturities (i.e. 01.04.2018 & 15.08.18) and the 1 July 2019 maturity as its yields were seen hitting intraday highs of 8.26%, 8.35% and 8.77% respectively against its previous days closings of 8.20/22, 8.28/32 and 8.70/72. However, buying interest at these levels curtailed any further upward movement with a limited amount of activity witnessed on the 2017 maturity within the range of 7.64% to 7.68% and the 2022 maturity within the range of 9.80% to 9.84% as well.
Meanwhile, weighted averages (WAvgs) at yesterday’s Treasury bill auction continued its steady descending trend with the 91-day and 182-day maturities reflecting dips of 1 basis point (bp) each to 6.53% and 6.71% respectively. However the Wavg on the 364-day maturity remained unchanged at 7.00%.
Nevertheless, the 364-day bill continued to reflect markets continued appetite as it represented 88.7% of the total accepted amount of Rs. 13.6 billion against its total offered amount of Rs. 10 billion.
In secondary bill markets, maturities approaching the 364-day bill were seen in demand subsequent to the auction as it was seen changing hands within the range of 6.90% to 6.92%.
Meanwhile in money markets, the total surplus of Rs. 2.78 billion was deposited at CBSL’s Standing Deposit Facility Rate (SDFR) of 6.50% as the Central Bank refrained from conducting any auctions under its Open Market Operations (OMO) yesterday. This in turn kept overnight call money and repo rates steady to average 6.98% and 6.56% respectively.
Rupee dips marginally
The rupee was seen dipping marginally yesterday to close the day at Rs. 130.27/30 in comparison to its previous day’s closing level of Rs. 130.23/24 on the back of importer demand. The total USD/LKR traded volume for the previous day (17 June) stood at $ 63.60 million.
Some of the forward dollar rates that prevailed in the market were 1 Month: Rs. 130.73, 3 Months: Rs. 131.59 and 6 Months: Rs. 132.74.