Rs 206 Bn T-Bill Auction Fully Subscribed; Rates Drop Across the Board

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Daily report for the 11th December 2024 – Courtesy Wealth Trust Securities Ltd

  • Rs 206 Bn T-Bill Auction Fully Subscribed; Rates Drop Across the Board
  • Secondary Bond Market Yields Decline Ahead of Rs 132.50Bn T Bond Auction
  • Rupee appreciates slightly

At the weekly Treasury Bill auction conducted yesterday, weighted average rates declined across all three maturities. Accordingly, the weighted average rates on the 91-day tenor dropped by 04 basis points to 8.69%, the 182-day tenor by 06 basis points to 8.88% and the 364-day tenor by 01 basis point to 9.07%. Total bids received exceeded the offered amount by 2.27 times, and the entire Rs 206.00 billion on offer was successfully raised at the 1st phase.

The 2nd phase of subscription for the auction will be opened across all 3 tenors at the weighted average rates until close of business of the day prior to settlement (i.e., 4.00 pm on 12.12.2024). Given below are the details of the auction;

The Secondary Bond Market yesterday saw yields decline further on the back of healthy market activity and transaction volumes. However, following the announcement of the T-Bill auction results activity was seen moderating as market participants were seen adopting a wait-and-see approach ahead of the upcoming T-bond Auction.

The yield on the 15.02.28 and 15.03.28 maturities were seen declining from 10.37% to 10.30%. The 01.05.28 maturity was seen trading down the range from 10.47%-10.36%, while the 01.07.28 maturity traded down from 10.50%-10.45%. The 15.09.29 maturity was observed trading at the rate of 10.85%. Additionally, trades were observed on the 2027 (i.e. 01.05.27, 15.09.27 & 15.12.27) and 15.05.30 maturities at levels of 9.85%, 9.95%, 10.00% and 11.07%-11.05% respectively.

This comes ahead of the Rs. 132.50 billion round of Treasury Bond auctions due to be held today the 12th of December (Thursday).

The auction will be comprised of:

  • Rs. 77.50 billion: Maturing on September 15, 2029, with a coupon rate of 11.00%.
  • Rs. 55.00 billion: Maturing on June 01, 2033, with a coupon rate of 09.00%.

For context, the immediately preceding round of Treasury Bond Auctions, with a total offered amount of Rs. 205.00 billion held on 28th November, achieved an impressive result. Total bids exceeded the offered amount by 2.37 times and all maturities were fully subscribed in the first phase through competitive bidding:

  • 15.10.28 (11.00% coupon): Rs. 80 billion raised at the weighted average rate of 10.62%
  • 15.03.31 (11.25% coupon): Rs. 75 billion raised at the weighted average rate 11.28%
  • 01.11.33 (9.00% coupon): Rs. 50 billion raised at the weighted average rate 11.40%.

The total secondary market Treasury bond/bill transacted volume for 10th December was Rs. 16.39 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 8.01% and 8.07% respectively.

The DOD (Domestic Operations Department) of Central Bank abstained from conducting any auction yesterday.

The net liquidity surplus stood at Rs. 234.79 billion yesterday. Rs 1.25 billion was withdrawn from the Central Banks SLFR (Standing Lending Facility Rate) of 8.50%, while an amount of Rs. 236.04 billion was deposited at the Central Banks SDFR (Standard Deposit Facility Rate) of 7.50%.

Forex Market

In the Forex market, the USD/LKR rate on spot contracts closed the day appreciating slightly to Rs.  290.25/290.30 against its previous day’s closing level of Rs. 290.30/290.35.

The total USD/LKR traded volume for 10th December was US $ 92.78 million.

(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)