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Daily report for the 12th June 2024 – Courtesy Wealth Trust Securities Ltd
- T-Bill Auction fully subscribed; rates up
- Secondary Bond market yields increase further
- Record-breaking T Bond auction in focus
At the weekly Treasury bill auction held yesterday, the entire offered amount of Rs 215 billion was successfully taken up during the first phase with total bids received exceeding the offered amount by 1.45 times. However, the weighted average yields rose for the second week, with the yields across all three tenors moving up. The yield for the 91-day maturity increased by 19 basis points to 8.89%, the 182-day maturity by 26 basis points to 9.30%, and the 364-day maturity by 27 basis points to 9.54%.
The 2nd phase of subscription, across all three maturities will be opened until 4:00 pm on the day before the settlement date (i.e., 13.06.2024) at the respective weighted averages determined at the 1st phase of the auction. Given below are the details of the auction;
Meanwhile, the secondary bond market was relatively quiet with limited activity on selected tenors, while two-way quotes were seen increasing further.
Accordingly, trades were observed on the 15.01.25 and 01.07.25 maturity at the rate of 9.25% and 9.60% to 9.65% respectively. Similarly, the 01.06.26 maturity was seen changing hands at the rate of 10.25%. Additionally, the rate on the 01.05.28 was seen increasing to intraday highs of 11.20% from lows of 11.15%. The medium tenor 15.05.30 maturity traded within the range of 11.80% to 11.93%.
The largest Treasury Bond auction in Sri Lanka’s history, with a colossal offered amount of Rs 295 billion is scheduled for today. The auction will comprise of Rs 60 billion from a bond due on 15th October 2027 bearing a coupon of 10.30%, Rs 125.00 billion from a bond due on 15th September 2029 bearing a coupon of 11.00% and Rs 110.00 billion from a bond due on 01st December 2031 with a coupon rate of 12.00%.
For context, the previous Treasury bond auction on May 13, 2024, saw a bullish outcome with the entire Rs. 70 billion offered was taken up at the first phase. The total bids received were 3.63 times the offered amount. Strong demand across all three maturities led to weighted averages of 11.01% for the 01.05.28 maturity, 11.85% for the 15.10.30 maturity, and 12.17% for the 01.10.32 maturity.
The total secondary market Treasury bond/bill transacted volume for 11th June was Rs. 8.90 billion.
In money markets, the weighted average rates on overnight call money and Repo stood at 8.69% and 8.71% respectively while the net liquidity was a surplus Rs 154.44 billion yesterday. An amount of Rs. 166.34 billion deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 8.50%.
Further, the DOD (Domestic Operations Department) of Central Bank conducted an overnight reverse repo auction amounting to Rs. 11.90 billion at the weighted average rate of 8.56%.
Forex Market
In the Forex market, the USD/LKR rate on spot contracts closed the day, marginally down at Rs. 303.80/304.00, against its previous day’s closing level of Rs 303.50/303.75.
The total USD/LKR traded volume for 11th June was US $ 34.85 million.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)