Primary market fetches WAvgs well below secondary market

Wednesday, 31 December 2014 00:22 - - {{hitsCtrl.values.hits}}

Final bill auction for 2014 will see Rs. 12 b on offer

By Wealth Trust Securities The two Treasury bond auctions conducted yesterday, the first in three months, was seen recording weighted averages (WAvgs) well below its secondary market yields. The 6.7 year maturity of 1 August 2021 was seen recording a WAvg of 7.05% in comparison to a similar maturity of 1 May 2021 which was traded in secondary markets within the range of 7.30% to 7.40% while the 10.4 year maturity of 1 May 2025 recorded a weighted average of 7.88% in comparison to nine year maturity of 1 January 2024 which was quoted at levels of 7.80/90 in secondary markets. In addition, a limited amount of activity was witnessed on the 15 August 2018 maturity within the range of 7.11% to 7.14% and the 1 July 2022 maturity within the range of 7.70% to 7.75%. Meanwhile at today’s Treasury bill auction, a total amount of Rs. 12 billion will be on offer which will consist of Rs. 2 b, Rs. 3 b and Rs. 7 b on the 91 day, 182 day and the 364 day maturities respectively. At last week’s auction, WAvg’s on the 182 day and 364 day maturities increased by one basis point each to 5.84% and 6.00% respectively while the WAvg on the 91 day was recorded at 5.74%. In secondary bill markets, June 2015 bills were quoted within the range of 5.78% to 5.82% and November 2015 bills within 5.95% to 6.00%. Meanwhile in money markets, overnight call money and repo rates increased marginally to average 6.03% and 5.58% respectively as surplus liquidity decreased to Rs. 17.69 billion yesterday. Rupee stable The USD/LKR rates on spot next contracts and spot next-next contracts were seen closing the day at Rs. 132.05/15 and Rs. 132.10/30 respectively yesterday. The total USD/LKR traded volume for 29 December was $ 55.05 million. Some of the forward dollar rates that prevailed in the market were: one month – 132.60; three months – 133.65; and six months – 134.70.

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