Rs 102 Bn T-Bill Auction Fully Subscribed; Rates Drop Across the Board For 5th Straight Week

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Daily report for the 08th January 2025 – Courtesy Wealth Trust Securities Ltd

  • Rs 102 Bn T-Bill Auction Fully Subscribed; Rates Drop Across the Board For 5th Straight Week
  • Secondary Bond Market Yields Drop Ahead of Rs 190 Bn T-Bond Auction

The weighted average rates declined across all three maturities for the 5th consecutive week at its weekly Treasury Bill auction conducted yesterday. Accordingly, the weighted average rates on the 91-day tenor dropped by 08 basis points to 8.47%, the 182-day tenor by 12 basis points to 8.60% and the 364-day tenor by 04 basis point to 8.9%. Total bids received exceeded the offered amount by 2.87 times, and the entire Rs 102.00 billion on offer was successfully raised at the 1st phase in competitive bidding.

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., 3.00 pm on 09.01.2024). Given below are the details of the auction;

In the secondary bond market, renewed buying interest leading to the bill auction resulted in the yield of the liquid maturities of 15.02.28, 15.03.28, 01.05.28 and 01.07.28 decreasing to hit intraday lows of 10.15%, 10.13%, 10.30% and 10.40% respectively against its previous days closing levels of 10.18/22, 10.18/25, 10.35/40 and 10.40/44.

In addition, the 15.12.26, 15.01.27, 01.05.27, 15.12.27, 15.10.28, 15.12.28 and 15.09.29 maturities traded at levels of 9.45%, 9.50% to 9.55%, 9.75% to 9.78%, 9.87% to 9.90%, 10.49% to 10.55%, 10.56% and 10.78% to 10.80% as well.

This comes ahead round of Treasury Bond auction, due to be held on today, the 09th of January. The round of auctions will have on offer a total amount of Rs 190.00 billion. This will be comprised of Rs 60.00 billion from a 15th of October 2028 maturity bearing a coupon rate of 11.00%, Rs 80.00 billion from a 15th of October 2030 maturity bearing a coupon rate of 11.00% and Rs 50.00 billion from a 01st November 2033 maturity bearing a coupon rate of 09.00%.

For context, the previous round of Treasury Bond auctions conducted on the 30th December 2024 managed to successfully raise the entire offered amount of Rs 80.00 billion. The total bids received exceeded the offered amount by 2.82 times. In particular, the 15.10.28 maturity (bearing a 11.00% coupon) recorded a resoundingly bullish outcome and was issued at a weighted average yield of 10.42%. Maturity-wise the entire Rs 45.00 billion offered was snapped up at the 1st phase of subscription in competitive bidding. This maturity was traded at 10.45% prior to the auction.  A 01.06.33 maturity (bearing a 09.00% coupon) was issued at a weighted average yield of 11.47%. Incidentally this was the same rate it was issued at the immediately previous auction held on 12th December. However, this maturity raised only 33.23% or Rs 11.63 billion at the 1st phase in competitive bidding.  This prompted the opening of a second phase which saw the entire maturity-wise offered amount of Rs 35.00 billion raised.

The total secondary market Treasury bond/bill transacted volume for 07th January 2025 was Rs. 20.19 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 7.99% and 8.03% respectively.

The net liquidity surplus stood at Rs. 145.50 billion yesterday. Rs 0.54 billion was withdrawn from the Central Banks SLFR (Standing Lending Facility Rate) of 8.50%, while an amount of Rs. 145.50 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 at Rs. 296.05/296.15 as against its previous day’s closing level of Rs. 296.00/296.30.

The total USD/LKR traded volume for 07th January 8, 2025 was US $ 111.85 million.

 

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