Weekly averages continue to increase ahead of bond auctions

By Wealth Trust Securities

The weekly weighted averages were seen edging up for a third consecutive week yesterday as the exact offered amount of Rs. 18 billion was accepted at the auction. 

The 182 day bill recorded an increase of three basis points to 9.30% followed by the 364 day bill by two basis points to 9.67% while the bids to offer ratio stood 2.79:1.

Secondary market bond yields remained mostly unchanged yesterday as activity moderated with the liquid maturities of 01.08.26 and 01.09.28 changing hands at levels of 10.65% and 10.85% to 10.93% respectively. 

In addition, the 2018 maturities, 01.05.20, 01.05.21, 01.07.22 and 01.09.23 maturities were seen changing hands at levels of 9.42% to 9.55%, 9.97% to 10.00%, 10.25% to 10.32%, 10.40% to 10.50% and 10.50% to 10.55% respectively as well.

 This was ahead of today’s Treasury bond auctions of Rs. 25 billion which will consist of Rs. 10 billion on a two-year maturity of 15.09.2019 and Rs. 15 billion on a 7.11 year maturity of 01.08.2025. The last round of auctions held on the 27 July 2017 for the maturities of 01.07.2022 and 15.06.2027 recorded weighted averages of 10.43% and 10.59% respectively.

 The total secondary market Treasury bond/bill transacted volumes for the 28 August was Rs. 3.21 billion.

Meanwhile, in money markets, the overnight call money and repo rates averaged 8.29% and 8.26% respectively as the Open Market Operations (OMO) Department of the Central Bank was seen draining out an amount of Rs. 18.228 billion on an overnight basis at a weighted average of 7.27%. The net surplus liquidity in the system stood at Rs. 38.99 billion.

 Rupee appreciates

The USD/LKR rate on spot contracts appreciated yesterday to close the day at Rs. 152.75/80 against its previous day’s closing levels of Rs. 152.90/95 on the back of export conversions and inward remittances outpacing importer demand. 

The total USD/LKR traded volume for 28 August was $ 35.25 million.

Some of the forward USD/LKR rates that prevailed in the market were one month - 153.35/45; three months - 155.20/35 and 6 Months - 157.60/75.