Static policy rates make bond markets active

Wednesday, 8 August 2012 00:00 - - {{hitsCtrl.values.hits}}

IN the backdrop of the Central Bank keeping its policy rates unchanged for a fourth consecutive month, the secondary bond market yesterday reflected a selected level of activity, Wealth Securities said.

It said yields dipped marginally in morn-ing trading, with the 20-month bond and the four-year bond being the picks in terms of the liquid maturities as the yields hit intraday lows of 13.64% and 14.16% respectively. “However profit taking at these levels along with additional selling pressure saw yields increasing once again to levels of 13.68% and 14.20%. Furthermore, a limited amount of activ-ity was witnessed on the five year maturity as well, with its yield closing the day at 14.30% sub-sequent to opening at levels of 14.27%,” debt market specialist Wealth Trust said. It said the Public Debt Department (PDD) of the Central Bank announced a total amount of Rs. 18 billion for its weekly Treasury bill auction to be held today, with Rs. 4 billion and Rs. 7 bil-lion each being offered on its 91 day, 182 day and 364 day maturities respectively.At last week’s auction weighted averages on the 91 day and 364 day maturities remained unchanged at 11.35% & 13.15% respectively, while the 182 day increased by two basis points to 12.87%. Wealth Trust said in money markets, overnight call money and repo rates remained mostly unchanged yesterday, at levels of 10.45%-10.50% and 9.45%-9.60% respectively as market surplus liquidity increased by Rs. 1.8 b from its previous days level of Rs. 18 b. An amount of Rs. 19.2 b was mopped up on an overnight basis at a weighted average of 9.4250% by the Central Bank through its Open Market Operations (OMO). The rupee remained stable at levels of Rs. 131.90 as volumes continued to remain moder-ate. Among forward dollar rates that prevailed in the market were one month 133.17, three months 135.35 and six months 138.50.

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