Secondary market bond yields dip further to end 2013 on a positive

Wednesday, 1 January 2014 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities The positive momentum in secondary bond markets continued yesterday as well as yields decreased yesterday mainly on the liquid two 2018 maturities (i.e. 01.04.2018 and 15.08.18) to hit intraday lows of 9.39% and 9.45% respectively against their opening daily levels of 9.45/50 and 9.53/60.

The most liquid maturity of 1 April 2018 has reflected a drop of 240 basis points for the year 2013. The trend was further supported by the Inflation announcement for the month of December, which reflected a sharp deceleration on the point to point basis to a 22 month low of 4.7% against market expectations of a marginal drop. Meanwhile the annualised average dipped as well to a fourteen month low of 6.9%. Furthermore in secondary bill market, the 364-day bill was quoted at levels of 8.00%-8.10% ahead of today’s

weekly Treasury bill auction, the first in the year 2014 where a total amount of Rs. 15 billion will be offered which will consist of Rs. 2 billion, Rs. 3 billion and Rs. 10 billion on the 91-day, 182-day and the 364-day maturities respectively. At last week’s auction, weighted averages on all three maturities declined for a 14th consecutive week to 7.54%, 7.85% and 8.29% respectively. Meanwhile in money markets, overnight call money and repo rates remained steady to average 7.66% and 6.97% respectively despite net surplus liquidity dipping to Rs. 3.43 billion yesterday. An amount of Rs. 16.36 billion was

deposited at CBSL’s repo window of 6.50% as the Central Bank refrained from conducting any OMO auctions yesterday. Interestingly, the Central Bank’s discount window of 8.50% was seen been accessed yesterday for amount of Rs. 12.93 billion. Rupee remains steady Meanwhile in Forex markets yesterday, the rupee closed the year at levels of Rs. 130.75 – Rs. 130.85, on the back of thin volumes. The total USD/LKR traded volume for the previous day (30 December 2013) stood at $ 33.23 million. Some of the forward dollar rates that prevailed in the market were 1-Month: Rs. 131.25, 3-Months: Rs. 132.05 and 6-Months: Rs. 133.68.