Weekly T-bill weighted average yields increase for second consecutive week

Wednesday, 24 December 2014 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities The weighted average yield of the 364 day bill increased for a second consecutive week at the weekly Treasury bill auction conducted yesterday. The increase of one basis point resulted in the yield moving back up to 6%. The weighted average yield of the 182 day bill too increased by one basis point to 5.84%. The 91 day bill which was offered after a lapse of nine weeks, recorded a weighted average yield of 5.74%. The total accepted amount of Rs. 21 billion was Rs. 9 billion more than the initial offered amount of Rs.12 billion. However, in secondary bond markets, yields of the liquid maturities ie; 01.07.2022 and 01.01.2024, closed the day marginally lower at levels of 7.68/74 and 7.70/75, subsequent to hitting intraday highs of 7.82% and 7.85%. Furthermore, buying interest centred on the two 2018 maturities (i.e. 01.04.2018 and 15.08.2018) resulted in trades taking place at lows of 7.00% and 7.10% respectively. In the meantime bills maturing in June 2015 and December 2014 were quoted within the range of 5.84% to 5.90% and 5.95% to 6.05% respectively. In the money market, overnight call money and repo rates remained steady to average 6.00% and 5.53% respectively as no auction was conducted under The Open Market Operations (OMO). Surplus liquidity stood at Rs. 10.65 billion. Rupee remains steady The USD/LKR on spot next contracts remained broadly steady to close the day at Rs. 131.9975/02. The total USD/LKR traded volume for 22 December 2014 was $ 78.25 million. Some of the forward dollar rates that prevailed in the market were 1 month – 132.55; 3 months – 133.40 and 6 months – 134.55.

Rupee forwards end steady; importer dollar demand weighs

Reuters: Rupee forwards closed steady for a seventh straight session on Tuesday despite importer dollar demand as the central bank capped trading at 132.00 per dollar through moral suasion. Four-day forwards, which were actively traded, closed at 131.99/132.05 per dollar. “We see some unusual imports towards the end of this year,” said a currency dealer, adding that the impact of lower interest rates and stable exchange rate was seen now. Three-day forwards, or spot-next, started to trade on Monday around 131.99 per dollar level, dealers said. The spot currency was not traded after the Central Bank capped the currency at predetermined levels to prevent volatility, traders said. Central Bank Governor Ajith Nivard Cabraal said on Thursday that the rupee would be stable during this month. Overseas investors sold a net Rs. 367 million worth of government securities during the week ended 17 December.

Bourse ends lower after political defections

Reuters: Stocks edged down on Tuesday as fresh defections from the ruling party hit sentiment ahead of the presidential polls in January. However, turnover hit a near five-week high of Rs. 3.38 billion ($ 26 million) due to block deals in top lender Commercial Bank of Ceylon Plc. Tuesday’s turnover was more than double this year’s daily average of Rs. 1.41 billion, stock exchange data showed. The main stock index fell 0.19%, or 13.52 points, to close at 7,238.05. “Sentiment is down due to defections yesterday,” a stockbroker said. “Going forward, the market may be sluggish and weaker with more defections expected from the ruling party raising concerns about political stability.” Late on Monday, two ruling party legislators, including a Cabinet minister, defected from President Mahinda Rajapaksa’s United People’s Freedom Alliance to join the opposition camp. With the latest defections, Rajapaksa has lost his two-thirds majority for the first time in more than four years. Fifteen legislators, including two Buddhist party legislators and former health minister Maithripala Sirisena, who as the consensus candidate of a united opposition, is challenging Rajapaksa’s bid for a third term, have defected after the president announced snap elections last month. Two opposition legislators have defected to the ruling party. Net foreign inflows into stocks in the session were Rs. 112.7 million, extending net inflows to Rs. 21.6 billion so far this year, exchange data showed. Commercial Bank, which accounted for more than 80% of the day’s turnover, gained 2.67%. DFCC Bank lost 2.72%, while construction firm Access Engineering fell 5%.