Secondary market bond activity moderates as yields hold steady

Thursday, 27 February 2014 01:16 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities Activity in secondary bond markets were considerably moderates with not much movement in yields both prior to and subsequent to the primary auction. The auction attracted bids to the value of Rs. 9.9 billion out of which Rs. 3.05 billion was accepted. The amount on offer was Rs. 3.0 billion. The weighted averages of the three maturities were 9.90% on the 01.07.2011, 10.00% on the 01.01.2024 and 10.76% on the 01.01.2029. The liquid two 2018 maturities (i.e. 01.04.2018 and 15.08.2018) closed the day at levels of 8.76/80 and 8.83/88 whilst the two 2019 maturities (15.01.2019 and 01.07.2019) were quoted at levels of 8.92/96. Furthermore, the 364-day bill continued to attract quotes between 7.00% and 7.08%.

In the meantime, the inflation figure for the month of February is due on Friday (28), and is expected to remain at somewhat the same levels as January which were 4.40% on the point to point and 6.50% on the annualised average. In the money market, the total surplus amount of Rs. 12.36 billion was deposited at CBSL’s Standing Deposit Facility Rate (SDFR) of 6.50% as the CBSL continued to refrain from conducting any auctions under its Open Market Operations (OMO). This in turn helped overnight call money and repo rates to hold its levels to average 6.96% and 6.40% respectively. In a continued effort to drain out excess liquidity on a more permanent basis a total amount of Rs. 17.10 billion was mopped up from the system value (28) by way of three term repo auctions for 28 days, 35 days and 77 days at rates of 6.74%, 6.78% and 6.77% respectively. Rupee holds steady

The dollar/rupee rate remained mostly unchanged to close the day at Rs. 131.03 – Rs. 131.07. The total USD/LKR traded volume for the previous day (25 February 2014) stood at $ 81.55 million. Some of the forward dollar rates that prevailed in the market were 1-Month: Rs. 131.63; 3-Months: Rs. 132.58 and 6-Months: Rs. 134.00.

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