Weekly weighted averages skyrocket

• Week on week increases at over one year highs 
• Secondary bond market in numb mode

By Wealth Trust Securities

The weekly weighted averages at Monday’s Treasury bill auction skyrocketed after a lapse of two weeks to levels last seen in October 2013. The 364 day bill recorded the sharpest increase and its highest increase week on week (against its last recorded average) since November 2011 by 90 basis points (bp) to 9.90% closely followed by the 182 day bill by 80 bp to 9.29% and the 91 day bill by 62 bp to 8.30% to register its highest week on week increases since March 2015 as well. 

Interestingly, the accepted amount on the 364 day bill was Rs. 3.2 billion higher than its offered amount of Rs. 9 billion while the overall accepted amount exceeded the total offered amount of Rs. 24 billion by 4.7 billion.

The secondary bond market went into numb mode following the auction results as two way quotes widened considerably. In morning hours of trading 2018 maturities were seen changing hands within the range of 11.10% to 11.25% once again. In secondary market bills, the 182 day and 364 day bills were seen changing hands within the range of 9.80% to 10.00% and 10.45% to 10.55% respectively post auction. In money markets, net surplus liquidity was seen increasing to Rs. 19.03 billion on Monday as call money and Repo rates remained broadly steady to average 7.92% and 7.93% respectively.  Rupee depreciates further   

The rupee on one week forward contracts was seen depreciating further to close the day at Rs. 145.85/95 against its Friday’s closing level of Rs. 145.60/75 on the back of importer demand. The total USD/LKR traded volume for the 18 March was $ 55.40 million.  Some of the forward USD/LKR rates that prevailed in the market were 1 month – 146.50/90; three months – 148.10/50 and six months – 150.45/75.