Activity dries up in secondary bond markets

Friday, 5 July 2013 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities A very limited amount of activity was witnessed in secondary bond markets yesterday, with the liquid two five-year maturities (i.e. 1 April 2018 and 15 August 2018) closing the day mostly unchanged at levels of 11.39/41 and 11.46/49 respectively subsequent to changing hands at levels of 11.40% to 11.42% and 11.46%. In secondary market bills, the 364-day bill was seen closing the day at levels of 10.60/62. The overnight call money and repo rates decreased marginally to average 8.66% and 8.19% respectively as surplus liquidity remained at a two month high of Rs. 38.65 b yesterday. The Open Market Operations (OMO) department of the Central Bank was seen mopping up an amount of Rs. 37.50 b on an overnight basis at a weighted average of 7.79% by way of a repo auction while a further amount of Rs. 1.15 b was seen been deposited at CBSL’s repo window of 7%. Furthermore the OMO department was seen conducting three auctions for outright sales of Treasury bills for a total amount of Rs. 12.75 b and an 11-day term repo auction for an amount of Rs. 10 b in an effort to mop up liquidity on a permanent basis. However only an amount of Rs. 3 b in total was drained out from outright sales for durations of 28 days, 42 days and 49 days at weighted averages of 8.17%, 8.35% and 8.40% respectively, value dated 5 July while the term repo auction did not attract any bids.

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