Upward trend in secondary market bond yields continue ahead of primary auctions

By Wealth Trust Securities

The secondary market bond yields were seen increasing further yesterday ahead of today’s Treasury bond auctions. 

Today’s bond auctions, conducted in lieu of a Treasury bond maturity of Rs. 83.9 billion due on 1 September, will see a total amount of Rs. 40 billion on offer consisting of Rs. 12.5 billion each on a 14.08-year maturity of 15.05.2030 and a 9.11 year maturity of 01.08.2025 and a further Rs. 10 billion on a 8.00-year maturity of 01.09.2023 and Rs. 5 billion on a 4.02-year maturity of 01.11.2019. 

In secondary markets, selling interest saw yields on the liquid maturities of 01.06.18, 01.05.20, 01.08.21, 01.09.23 and 01.08.25 increase to daily highs of 7.95%, 8.60%, 9.05%, 9.60% and 9.70% respectively against its previous day’s closing levels of 7.85/90, 8.43/48, 8.95/00, 9.45/50 and 9.65/70 on the back of thin volumes changing hands and two-way quotes widening. 

Meanwhile, in money markets, overnight call money and repo rates averaged 6.28% and 6.22% respectively as the Open Market Operations (OMO) department of the Central Bank was seen infusing liquidity for a third consecutive day for an amount of Rs. 4.81 billion yesterday on an overnight basis at a weighted average of 6.15%. The net surplus liquidity stood at Rs. 43.41 billion.

Rupee loses ground for a second consecutive day

The USD/LKR rate on spot contracts lost ground by a further 10 cents for a second consecutive day to close day at Rs. 134.10 yesterday. The total USD/LKR traded volume for the 21 August 2015 was $ 27.18 million.  Some of the forward USD/LKR rates that prevailed in the market were one month - 134.76/86; three months - 135.96/06 and six months -137.78/88