Activity moderates ahead of Treasury bond auctions

Tuesday, 12 March 2019 00:00 -     - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

Activity in the secondary bond market moderated considerably yesterday, ahead of today’s Treasury bond auctions. Limited amount of trades were witnessed consisting of the maturities of four 2021’s (i.e. 01.03.21, 01.08.21, 15.10.21 and 15.12.21), 01.08.26 and 01.05.29 at levels of 10.65% to 10.70%, 11.05% and 11.34% respectively. In the secondary bill market, the 7 February bill changed hands within the range of 10.48% to 10.50%.

This was ahead of the Treasury bond auctions due today, where a total amount of Rs. 70 billion will be on offer consisting of Rs. 30 billion on a new five-year maturity of 15.03.2024 and Rs. 40 billion on a 10-year and two-month maturity of 01.05.2029. 

The previous Treasury bond auctions conducted on 31 January for the maturities of 01.08.2021 and 15.01.2027 recorded weighted averages of 10.85% and 11.30% respectively.

The total secondary market Treasury bond/bill transacted volumes for 8 March was Rs. 6.38 billion.

In the money market, the overnight call money and repo rates averaged 8.92% and 8.93% respectively as the overnight net liquidity shortfall decreased to Rs. 19.06 billion yesterday. The OMO Department of Central Bank infused liquidity by way of an overnight reverse repo auction for successful amount of Rs. 15.00 billion, at weighted average yield of 8.99%.

Rupee loses marginally   

The USD/LKR rate was seen depreciating marginally yesterday to close the day at Rs. 178.50/65 against its previous day’s closing level of Rs. 178.40/55 on the back of buying interest.

The total USD/LKR traded volume for 8 March was $ 76.50 million.

Some of the forward USD/LKR rates that prevailed in the market were one month – 179.55/70; three months – 181.30/60 and six months – 184.25/55.