Yields dip marginally ahead of weekly bill auction

Wednesday, 3 April 2013 01:02 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

Secondary market bond yields dipped marginally yesterday ahead of the weekly bill auction due today. The upward trend which was initially created by the results of the primary auctions of both Treasury bonds and bills which reflected increases on its weighted averages was nullified with point to point inflation recording a dip far exceeding expectations.

However, the yields were seen edging upward once again on Monday mainly due to the fact that the previous weeks auctioned 5 year maturity of 15th July 2018 was seen trading at a premium of 15 basis points (bp) at levels of 11.35% to 11.44% above the two liquid 5 year maturities ( i.e 01.04.2018 and 15.08.2018). The two liquid 5 year maturities dipped to a daily low of 11.20% yesterday from its opening levels of 11.28% while the 15th July 2018 maturity was traded at levels of 11.42% to 11.44% widening the premium to 20 bp. Furthermore the 4 year maturity was seen changing hands within the range of 11.10%-11.20% as well. Today’s Treasury bill auction will see amounts of Rs.1 Bn, Rs.2 Bn and Rs.9 Bn being offered for 91 days, 182 days and 364 days respectively. At last week’s auction weighted averages increased by 4 bp and 9 bp respectively on the 91 and 364 day bills respectively while all bids for the 182 day bill was rejected.

Surplus liquidity on an overnight basis, increased to Rs.37.891 Billion with an amount of Rs 33.64 Bn being mopped up on an overnight basis by way of a Repo auction conducted by the Open Market Operations (OMO) Department of the Central Bank at a WAvg of 8.35%. The overnight call money and repo rates remained mostly unchanged to average 9.43% and 8.57% respectively.

In Forex markets, the rupee lost ground by around 10 cents yesterday to close the day at Rs 126.40 / 45 in comparison to its previous day’s closing level of Rs.126.30 / 35. The total USD/LKR traded volume for the previous day (01-04-13) stood at US $ 54.22 million.