Bond yields move higher ahead of weekly bill auction

Wednesday, 12 September 2018 00:00 -     - {{hitsCtrl.values.hits}}


  • CBSL injects liquidity for the first time in close to 5 months

By Wealth Trust 

Securities Ltd. 

Secondary bond market yields were seen increasing for a third connective day on the back of average volumes changing hands driven by foreign and local selling interest. 

This resulted in yields on the maturities of 15.10.21, 15.07.23, 01.08.24, 15.06.27 and 01.09.28 increasing to intraday highs of 9.76%, 10.05%, 10.23%, 10.37% and 10.48% respectively against its previous day’s closing levels of 9.65/75, 9.98/03, 10.10/17, 10.27/37 and 10.28/38. 

Furthermore, the maturities of 15.11.18, 01.05.20, three 2021’s (i.e. 01.03.21, 01.05.21 and 01.08.21), 01.10.22 and 15.03.23 were seen changing hands at levels of 8.05%, 9.28% to 9.35%, 9.58% to 9.70%, 9.95% and 10.10% respectively as well. In the secondary bill market, the 12 April 2019 maturity changed hands within the range of 8.80%-8.84%

Today’s weekly Treasury bill auction will have on offer a total amount of Rs. 16.5 billion consisting of Rs. 4 billion of the 91 day maturity and Rs. 12.5 billion on the 364 day maturity. At last week’s auction, the weighted averages on the 182 day and 364 day maturities decreased by three and two basis points respectively to 8.00% and 8.97%.

The total secondary market Treasury bond/bill transacted volumes for 10 September 2018 was Rs. 4.29 billion.

Given below are the closing, secondary market yields of the most frequently traded T-bills and bonds. 

In money markets yesterday, the Open Market Operations (OMO) Department of the Central Bank of Sri Lanka was seen injecting liquidity to the system by way of a reverse repo auction for the first time since 17 April 2018. 

An amount of Rs. 8.4 billion was successfully infused out of a total offered amount of Rs. 30 billion for a period of 14 days at a weighted average of 8.09%, valued today. Overnight call money and repo rates remained mostly unchanged to average 7.90% and 8.00% respectively as net surplus liquidity increased to Rs. 18.49 billion.

Rupee closes mostly unchanged   

 The USD/LKR rate on spot contracts was seen closing the day at Rs. 162.30/40 against its previous day’s closing levels of Rs. 162.35/50.

The total USD/LKR traded volume for 10 September 2018 was $ 41.25 million. Given below are some forward USD/LKR rates that prevailed in the market. 

 1 Month       -               163.10/30

3 Months      -              164.75/00

6 Months      -              167.15/45