Secondary market bond yields dip ahead of weekly bill auction

By Wealth Trust Securities
Secondary market bond yields decreased yesterday in thin trade ahead of today’s weekly Treasury bill auction.
Activity surrounded the liquid two maturities of 1 July 2022 and 1 January 2014 as its yields dipped to intraday lows of 7.87% and 8.17% respectively against its days opening highs of 8.40% and 8.55%.
In addition, a limited amount of activity was witnessed on the two 2018 maturities (i.e. 1 April 2018 and 15 August 2018), the 1 July 2019 maturity and the 1 May 2021 maturity as well within the range of 7.07% to 7.30%, 7.20% to 7.35%, 7.25% to 7.50% and 7.80% to 8.15% respectively as well.
Today’s weekly auction will have on offer Rs 8 billion in total, solely on the 364 day maturity as the 91 day and 182 day maturities will not be on offer.
At last week’s auction, all bids for the 91 day and 182 day bills were rejected while the weighted average on the 364 day bill increased by 11 basis points to 6.00% reflecting its first increase in 56 weeks. In secondary bill markets, the 364 day bill was seen changing hands within the range of 6.05% to 6.10% while durations centring it was seen changing hands within the range of 6.00% to 6.105 as well.  In money markets, overnight call money and repo rates were seen averaging 6.00% and 5.50% respectively yesterday as liquidity stood at a surplus of Rs. 27.72 billion. The Open Market Operations (OMO) department of Central Bank was seen mopping up an amount of Rs. 10 billion yesterday by way of a four day repo auction at a weighted average of 5.78%.
Rupee continues
to dip marginally
The dollar/rupee rate on spot next contracts (four day forwards) was seen dipping marginally yesterday to close the day at Rs. 130.85/90 on the back of continued importer demand. The total USD/LKR traded volume for 17 October was at $ 46.90 million.
Given are some forward dollar rates that prevailed in the market: one month – 131.15; three months – 132.08; six months – 133.08.