Secondary market bond yields dip following outcome of Bond auction

Friday, 28 March 2014 00:00 -     - {{hitsCtrl.values.hits}}

By Wealth Trust Securities The Treasury bond auctions conducted yesterday, the first in one month drew considerable interest recording impressive weighted averages (WAvg’s) of 10.00%, 11.32% and 11.75% respectively for the maturities of 01.07.2022, 01.01.2034 and 01.01.2044. Activity in secondary bond markets remained high yesterday as yields were seen edging up during morning hours of trading, mainly on the liquid two 2018 maturities (i.e. 01.04.2018 & 15.08.18) and the five year maturity of 01.07.2019 to intraday highs of 8.92%, 8.99% and 9.35% respectively. However, following the outcome of the Treasury bond auction, yields were seen dipping once again to hit daily lows of 8.83%, 8.93% and 9.30% while limited amounts on the seven year maturity of 01.07.2021 were seen changing hands within the range of 10.06% to 10.10%. In secondary bill markets, November 2014 bills were seen changing hands within the range of 6.95% to 7.00% and the latest 364-day bill at 7.05%. Liquidity reverses to a negative for the first time in seven months Meanwhile in money markets, the Open Market Operations (OMO) department of Central Bank was seen infusing an amount of Rs. 4 billion into the system on an overnight basis by way of a Reverse Repo auction at a weighted average of 6.72% for the first time in eight months as overall liquidity reversed to a net deficit for the first time in seven months as well. An amount of Rs. 1.36 billion was deposited at its Standing Deposit Facility Rate (SDFR) of 6.50%, bringing the net deficit to Rs. 2.64 billon yesterday. Overnight call money and Repo rates was seen increasing marginally to average 6.97% and 6.62% respectively. Rupee closes the day steady The dollar/rupee (USD/LKR) rate remained steady within the range of Rs. 130.70 - Rs. 130.75 for a second consecutive day yesterday. The total USD/LKR traded volume for the previous day (26 March 2014) stood at $ 72.02 million. Some of forward dollar rates that prevailed in the market were 1-Month: Rs. 131.34, 3-Months: Rs. 132.48 and 6-Months: Rs. 133.98.