5-year T-Bond yields edge up to pre-SRR cut levels

Friday, 23 August 2013 01:52 - - {{hitsCtrl.values.hits}}

Secondary market bond yields continued its upward trend yesterday mainly on the liquid two five year maturities (i.e. 1 April 2018 and 15 August 2018) as it was seen hitting levels last witnessed prior to the SRR cut of 200 basis points (bp) on 26 of June 2013. Wealth Trust Securities said the yield on 01 April 2018 maturity was seen hitting a two-month high of 11.70% yesterday against its opening levels of 11.48/55 as activity increased. In addition, activity was witnessed on two-year maturities within the range of 10.90% to 11.00%, on the three year maturities within the range of 11.00% to 11.10%, on the three-and-a-half-year maturity within the range of 11.48% to 11.52%, and the eight year maturity at levels of 11.75% as well, reflecting a parallel shift upwards on the overall yield curve. In secondary market bills, maturities centering on the 364-day bill continued to change hands within the range of 10.51% to 10.53% while March 2014 maturities were at levels of 9.90%. Foreign selling on rupee bonds coupled with a spike on the 3.5-year maturity yield was seen as the reasons behind the increase in yields according to market sources. Overnight call money and repo rates remained steady yesterday to average 8.68% and 8.17% respectively as surplus liquidity in money markets remained steady at Rs. 6.49 billion. The Open Market Operations (OMO) department of the Central Bank was seen mopping up an amount of Rs. 2 billion on an overnight basis by way of a Repo auction at a WAvg of 7.37% while a further Rs. 4 billion was mopped up for a period seven days at a WAvg of 7.95% as well. An amount of Rs. 0.49 billion was seen been deposited at its repo window rate of 7.00% as well.

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