Upward trend in secondary market bond yields continues ahead of weekly bill auction

Wednesday, 22 January 2014 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities The upward trend in secondary market bond yields continued further yesterday, as yields on the liquid two 2018 maturities (i.e. 15 August 2018 and 1 April 2018) were seen increasing to intraday highs of 9.11% and 9.15% respectively from its opening levels of 9.00/05 and 9.05/10 while the 1 July 2019 maturity saw trades take place within the range of 9.10% to 9.20% as well on the back of profit taking. Meanwhile, today’s Treasury bill auction will have on offer an total amount of Rs. 15 b, consisting of Rs. 2 b of the 91 day bill, Rs. 3 b of the 182 day bill and a further Rs. 10 b of the 364 day bill. The weight averages (WAvgs) at last week’s auction dipped for a 17th consecutive week, to record 6.86%, 7.02% and 7.15% respectively on the 91 day, 182 day and 364 day maturities.

In secondary bill markets, the 364 day bill was seen quoted at levels of 7.10/15 while duration adjacent to it was seen trading within the range of 7.00% to 7.10%. Meanwhile in money markets, overnight call money and repo rates remained steady to average 7.40% and 6.86% respectively as overall surplus liquidity stood at Rs. 56.29 billion yesterday. The Open Market Operations (OMO) department of Central Bank was seen carrying out term repo auctions yesterday, for a duration of three days and 30 days in order to mop up liquidity which saw amounts of Rs. 20 b and Rs. 4 b been drained at WAvg;s of 6.64% and 6.81% respectively while a further Rs. 36.19 b was deposited at its Standing Deposit Rate (SDR) of 6.50%. Rupee remains stable Meanwhile in Forex markets, the USD/LKR rate remained mostly unchanged to close the day at Rs. 130.75/80. The total USD/LKR traded volume for the previous day (18 January 2014) stood at US$ 47.70 million. Given are some forward dollar rates that prevailed in the market: one month – 131.22; three months – 131.98; six months – 132.90.