Treasury bond averages nose dive

Friday, 10 June 2016 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The weighted averages at yesterday’s Treasury bond auctions decreased considerably as an amount of Rs.20.6 billion was accepted against a total offered amount of Rs.18 billion. The weighted average on the 5.04 year maturity of 15th October 2021 reflected the sharpest drop of 51 basis points to 11.97% closely followed by the 10 year maturity of 01st June 2026 by 48 basis points to 12.50%. The 04 year maturity of 15th October 2018 and the 7.07 year maturity of 01st January 2024 dipped by 41 basis points each to 11.42% and 12.36% respectively.

Activity in secondary bond markets increased yesterday as yields decreased subsequent to the release of auction results. The liquid maturities of 15.10.21, 01.01.24 and 01.06.26 were seen dipping to intraday lows of 11.80%, 12.18% and 12.29% respectively against its previous day’s closing levels of 11.85/92, 12.30/35 and 12.42/50. The overall yield curve shifted downwards as two-way quotes on all other maturities were seen decreasing as well.

Meanwhile in money markets, the overnight call money and repo rates remained mostly unchanged to average at 8.18% and 8.05% respectively as the net surplus liquidity in the system stood at Rs.3.02 billion yesterday. The Open Market Operations (OMO) Department of Central Bank injected an amount of Rs.5 billion at a weighted average rate of 8.00%.

Spot contracts alive as rupee appreciates

The USD/LKR rate on the active spot next contract appreciated yesterday to close the day at Rs.145.50/60 against its previous days of Rs.145.90/00 while spot contacts were seen quoted at levels of Rs.145.45/55 for the first time in close to two months. The total USD/LKR traded volume for the 08th of June 2016 was US $ 93.25 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 Month - 146.35/50; 3 Months - 147.50/90 and 6 Months - 150.40/60.