T-bill auction fully subscribed; rates record mixed results

Wednesday, 30 April 2025 00:20 - - {{hitsCtrl.values.hits}}

Secondary bond market yields decline

By Wealth Trust Securities

The weekly Treasury bill auction conducted yesterday saw the entire Rs. 145 billion offered successfully raised at the 1st phase in competitive bidding. This marks the first instance in 6 straight weeks where a Treasury bill auction was fully subscribed. Total bids received exceeded the offered amount by 1.86 times.

The auction saw weighted average yield rates exhibit mixed results. Accordingly, the weighted average rates on the 91-day tenor increased by 03 basis points to 7.65% and the 364-day tenor rose by 01 basis points to 7.97%. However, the weighted average rate on the 182-day tenor declined by 01 basis points to 8.30%

Maturity-wise the 91-day tenor went undersubscribed. The shortfall was bridged by the 182-day and 364-day tenors which raised more than respective offered amounts. As a result, 92%+ of the total amount raised was attributed to the longer tenor maturities.

The Phase II subscription for ISINs LKA09125H017 and LKA36426E013 is now open until 3.00 p.m. of the business day prior to settlement date (i.e., 30.04.2025) at the WAYRs determined for the said ISINs at the auction.

The secondary bond market yesterday initially rallied and yields were seen declining on the back of aggressive buying interest. Market activity and transaction volumes were seen at robust levels. However, following the release of the auction results, rates were seen edging up marginally on the back of profit-taking pressure and activity slowed down. Despite this secondary market two-way quotes were seen closing the day lower.

The 15.09.27 maturity was seen trading at the rate of 9.50%. The 15.03.28 maturity was seen trading at the rate of 9.90%. The yield on the 15.10.28 and 15.12.28 maturities declined down the ranges of 10.05%-9.97% and 10.05%-10.00% respectively. Similarly, the yield on the 15.12.29 maturity declined down the range of 10.43%-10.36%. The 15.03.31 maturity was seen trading down the range of 10.92%-10.85%.

In money markets, the weighted average rates on overnight call money and Repo stood at 7.98% and 7.99% respectively.

The net liquidity surplus increased to

Rs. 145.47 billion yesterday. No funds were withdrawn from the Central Banks SLFR (Standing Lending Facility Rate) of 8.50%, while an amount of

Rs. 145.47 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 7.50%.

Forex Market

In the Forex market, the USD/LKR rate on spot contracts closed the day broadly steady at

Rs. 299.60/299.65 as against its previous day’s closing level of

Rs. 299.60/299.70.

The total USD/LKR traded volume for 28 April 2025 was $ 88.85 million.

Correction

The Direct Issuance Window for the Treasury Bond Auction held on 28 April will be open until

30 April.

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

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