Secondary market yields steady as activity dries up
Wednesday, 18 February 2015 00:00
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By Wealth Trust Securities
Activity in secondary bond markets dried up on Monday as yields remained steady with two-way quotes mainly seen on the two liquid 2018 maturities – 01.04.2018, 15.08.2018 along with 01.07.2022 maturity at yields of 7.12/14, 7.15/18 and 7.68/72 respectively. This is mainly due to the ‘wait and see’ approach by market participants ahead of the weekly Treasury bill auction due tomorrow. Further the June 2015 and November 2015 bills were seen quoted at levels of 5.90% -6.00% and 6.00% - 6.10% respectively in the secondary markets.
Wednesday’s weekly primary auction will have on offer a total amount of Rs. 10 billion, consisting of Rs. 2 billion on the 91 day, Rs. 3 billion on the 182 day and a further Rs. 5 billion on the 364 day maturities. At last week’s auction, the weighted averages increased to its highest levels in 20 weeks to record 5.88%, 5.98% and 6.10% respectively on 91 day, 182 day and 364 day maturities.
In money markets liquidity recorded a surplus of Rs. 38.09 billion on Monday. This is despite Rs. 13.99 billion been mopped out by the Open Market Operations (OMO) by the Central Bank at a weighted average of 5.91% by way of a two-day Repo auction. This led to overnight call money and repo rates decreasing to average 6.04% and 5.76% respectively.
Rupee remains stagnant
The spot and spot next contracts remained stable at levels of 132.80/00 and 132.82/00 respectively as markets remained inactive. The total USD/LKR traded volume for 13 February was at $ 48.65 million.
Some of the forward USD/LKR rates that prevailed in the market were 1 month – 133.38; 3 months – 134.65 and 6 months – 135.90.
