Liquidity returns to money markets ahead of weekly T-bill auction

Wednesday, 31 July 2013 00:45 -     - {{hitsCtrl.values.hits}}

By Wealth Trust Securities Liquidity returned to money markets yesterday to record a surplus of Rs. 4.12 billion as call money and repo rates remained steady to average 8.80% and 8.39% respectively. This was ahead of the scheduled weekly Treasury bill auction due today at which the rare phenomenon of only the 364-day bill will be on offer. At last week’s auction, all bids for the 91-day and 182-day bills were rejected while the weighted average (WAvg) on the 364-day bill dipped by 3 basis points to 10.56%. Furthermore, in secondary market bills, the 364-day bill was seen been quoted at levels of 10.42/45 yesterday. Meanwhile, at the Treasury bond auctions conducted yesterday, the total offered amount of Rs. 35 billion was accepted, as all three maturities attracted bids totalling up to Rs. 76.9 billion. The weighted average on the five year and 30-year maturities remained unchanged at 11.17% and 12.50% respectively against their previous WAvg’s while the WAvg of the 15-year maturity dipped to 12.10% against a similar maturity WAvg of 12.21% recorded in January. In secondary bond markets, activity continued to surround the liquid two five year maturities (i.e. 1.4.2018 and 15.8.2018) as its yields closed the day mostly unchanged subsequent to trading within a narrow band of 11.22%-11.24% and 11.27%-11.29% respectively. In addition, the three year maturity was seen changing hands within the range of 10.85%-10.88% while the four year and eight year maturities closed the day at levels of 10.90/00 and 11.50/58 respectively as well. However, most market participants were seen adopting a wait and see approach ahead of inflation numbers for July due today and the outcome of the bill auction.