Secondary market yields steady as activity dries up

Tuesday, 5 March 2013 01:26 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

Activity in secondary bond markets dried up yesterday as yields remained steady with two-way quotes mainly seen on the two liquid five-year maturities (i.e. 15 August 2018 and 1 April 2018) at levels of 11.10% -11.15% due to the “wait and see” approach by market participants ahead of this month’s monitory policy meeting which was brought forward to 8 March from its initial scheduled date of 15 March.

Furthermore the 364-day bill was seen been quoted at levels of 11.10% -11.12% in secondary markets. Meanwhile, the Central Bank increased its total offered amount for its weekly Treasury bill auction by Rs. 5 billion to Rs. 20 billion.

Overnight call money and repo rates remained steady to average 9.39% and 8.55% as surplus liquidity in money market remained high at Rs. 40.64 billion. This led to the Open Market Operations (OMO) department of Central Bank draining out an amount of Rs. 36.45 b at a weighted average of 8.35% by way of an overnight Repo auction.

Rupee continues stability

In Forex markets, the rupee continued to remain unchanged throughout the day within the range of Rs.127.45-Rs.127.50. However premiums on forward dollar contracts were seen widening marginally yesterday. The total USD/LKR traded volume for the previous day (1 March 2013) stood at US$ 35.73 million. Given are some forward dollar rates that prevailed in the market: one month – 128.44; three months – 130.16; six months – 133.10.