Secondary market bond yields continue to increase ahead of weekly auction

Wednesday, 27 July 2016 00:00 - - {{hitsCtrl.values.hits}}

Untitled-4 By Wealth Trust Securities

The continued selling interest, mainly on the belly end of the yield curve for a fifth consecutive day, saw secondary market bond yields increase further yesterday.

Yields on the liquid maturities of 01.10.22, 01.09.23, 01.01.24, 15.03.25 and 01.06.26 were seen increasing to intraday highs of 12.10%, 12.25%, 12.40% and 12.58% each against its days opening lows 12.00%, 12.20%, 12.35%, 12.40% and 12.45%.

On the short end of the curve, the 15.09.19 and 01.03.21 maturities were seen changing hands within the range of 11.50% to 11.53% and 11.80% to 11.83% respectively as well.

This was ahead of today’s weekly Treasury bill auction, where a total amount of Rs.19 billion will be on offer consisting of Rs.7.5 billion each on the 182 day and 364 day maturities and a further Rs.4 billion on the 91 day maturity.

At last week’s auction, weighted averages continued to decrease with the 91 day and 182 day maturities decreasing by 07 and 14 basis points respectively to seven week lows of 8.80% and 9.75%. The weighted average on the 364 day bill remained steady at 10.49%.

Meanwhile in money markets, overnight call money and repo rates remained steady to average 8.24% and 8.07% respectively as the Open Market Operations (OMO) Department of Central Bank was seen injecting an amount of Rs.31.44 billion at a weighted average of 7.98% on an overnight basis. The net liquidity shortfall stood at Rs.42.32 billion.

Rupee remains mostly unchanged

The USD/LKR rate on the active one week forward contract remained mostly unchanged to close the day at Rs.146.20/35 as markets were at equilibrium. The total volume traded during the day of 24 July 2016 was $ 66.50 million.

Given are some forward USD/LKR rates that prevailed in the market: one month – 146.90/00; three months – 148.40/50; six months – 150.80/90.

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