Rs. 175 b T-Bill auction fully subscribed

Thursday, 12 June 2025 03:44 - - {{hitsCtrl.values.hits}}

Weighted average rates remain mostly unchanged
Secondary Bond market quiet ahead of auction; yields steady
Rs. 111 b T-Bond auction in focus
Rupee appreciates

By Wealth Trust Securities

The weekly Treasury Bill auction conducted yesterday was fully subscribed. The entire Rs. 175.00 billion on offer was successfully raised in the first phase in competitive bidding. The total bids received exceeded the offered amount by 1.94 times.

The weighted average yield rate on the 182-day tenor declined marginally by 01 basis point to 7.72%. However, the weighted average yield rate on the 91-day tenor and 364-day tenors remained steady at 7.55% and 7.94% respectively.

The Phase II subscription for the 91-day and 364-day tenors is now open until 3 p.m. of business day prior to settlement date (i.e., 05.06.2025) at the WAYRs determined for the said ISINs at the auction.

The Secondary Bond market yesterday saw yields hold broadly steady. Market activity and transaction volumes were seen at subdued levels as market participants were seen adopting a wait-and-see approach ahead of the upcoming Treasury Bond auction.

Limited trades were seen on select liquid maturities. The 15.02.28 and 15.03.28 maturities were seen trading at the rate 8.70%. The 01.07.28 maturity traded at the rate of 8.80%. The 15.12.29 maturity was seen trading at the rate of 9.50%.

This will be followed by an Rs. 111.00 billion Treasury Bond auction scheduled to be held today (12 June). The auction will be comprised of:

1. Rs. 41.00 billion from a 15 October 2029 Maturity bearing a coupon rate of 10.35%

2. Rs. 70.00 billion from a 15 December 2032 Maturity bearing a coupon rate of 11.50%

The settlement for which will be held on 16 June 2025.

For reference, the previous round of Treasury Bond auctions held on Thursday, 29 May concluded on a strongly bullish note, with the entire Rs. 200 billion on offer successfully raised during the first phase via competitive bidding. Total bids amounted to 2.65 times the offer, indicating robust demand.

By maturity, the 01.07.2028 bond with a 9.00% coupon raised Rs. 40 billion at a weighted average yield of 8.85%. The 15.12.2029 bond with an 11.00% coupon raised Rs. 80 billion at a weighted average yield of 9.47%. Meanwhile, the 15.09.2034 bond with a 10.25% coupon also raised Rs. 80 billion at a weighted average yield of 10.46%.

Demand extended to the Direct Issuance Window as well, where Rs. 20 billion — the full limit — was raised out of total market subscriptions amounting to Rs. 54.27 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 7.70% and 7.72% respectively.

The net liquidity surplus stood at Rs. 184.77 billion yesterday. An amount of Rs. 0.07 billion was withdrawn from the Central Bank’s SLFR (Standing Lending Facility Rate) of 8.25%, while an amount of Rs. 182.84 billion was deposited at Central Bank’s SDFR (Standard Deposit Facility Rate) of 7.25%.

Forex market

In the Forex market, the USD/LKR rate on spot contracts appreciated to close Rs. 298.98/299.05 as against its previous day’s closing level of Rs. 299.00/299.10.

The total USD/LKR traded volume for 9 June 2025 was $ 67.30 million.

(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)

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