Weekly weighted averages nosedive

Thursday, 8 September 2016 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The weekly weighted averages at yesterday auction were seen dipping considerably as the bids to offer ratio was seen hitting a ninety-nine (99) week high of 797%. The 364 day bill reflected the sharpest decline of 34 basis points to 10.39% closely followed by the 91 day bill by 28 basis points to 8.75% and the 182 day bill by 23 basis points to 9.71%. The exact offered amounts of Rs.1 billion, Rs.2 billion and Rs.8 billion were accepted at the auction.

In the secondary bond market yesterday, yields were seen dipping leading to the outcome of the weekly auction as activity continued to be very high and increasing subsequent to it on the back of profit taking. The liquid maturities on the belly end of the curve, consisting of 01.03.21, 01.10.22, 01.09.23, 01.08.24, 15.03.25 and the two 2026’s (i.e. 01.06.26 and 01.08.26) saw its yields hitting intraday lows of 10.90%, 11.20%, 11.29%, 11.44%, 11.43%, 11.53% and 11.50% respectively against its previous day’s closing levels of 11.05/09, 11.27/32, 11.39/41, 11.45/52, 11.55/62, 11.63/68 each. On the short end of the curve, 2018 and 2019 maturities changed ahands within the range of 10.65% to 10.75% and 10.80% to 10.85% while on the long end the 01.09.28 and 15.05.30 changed hands within the range of 11.75% to 11.78% and 11.83% to 11.93%. In money markets, overnight call money and Repo rates remained steady to average 8.40% and 8.47% respectively as the net liquidity shortage increased to Rs.5.10 billion yesterday.

Rupee remains steady

In Forex markets yesterday, the spot as well as one week forward contracts remained steady to close the day at Rs.145.42/45 and Rs.145.68/75 respectively as markets were at equilibrium. The total USD/LKR traded volume for the 06th of September 2016 was $ 37.08 million. Some of the forward USD/LKR rates that prevailed in the market were 1 Month - 146.30/40; 3 Months - 147.90/00 and 6 Months - 150.25/35