Rs 120 Bn T-Bill Auction Fully Subscribed; Rates Drop Across the Board For 3rd Straight Week

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Daily report for the 24th December 2024 – Courtesy Wealth Trust Securities Ltd

  • Rs 120 Bn T-Bill Auction Fully Subscribed; Rates Drop Across the Board For 3rd Straight Week
  • Secondary Bond Market: Popular 2028 Tenors See Yields Edge Up
  • Rs 80 Bn T-Bond Auction Announced
  • Rupee Recovers

At the weekly Treasury Bill auction conducted on Tuesday (24th December), weighted average rates declined across all three maturities for the 3rd consecutive week. Accordingly, the weighted average rates on the 91-day tenor dropped by 04 basis points to 8.62%, the 182-day tenor by 04 basis points to 8.77% and the 364-day tenor by 06 basis point to 8.96%. Total bids received exceeded the offered amount by 2.13 times, and the entire Rs 120.00 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., 4.00 pm on 26.12.2024). Given below are the details of the auction;

The Secondary Bond Market on Tuesday saw profit taking continue to push yields up, with the bulk of the trading focused on the popular and liquid 2028 tenors.  However, renewed buying interest was seen kicking in at the higher levels, curtailing further upwards movement. The rest of the yield curve was seen holding broadly steady. Market activity and transaction volumes were seen at healthy levels.

The 15.09.27 maturity saw trades within the range of 9.80%-9.85%. The 15.02.28 maturity was seen trading within the range of 10.10%-10.15%. The mid-2028 durations saw the most marked increase, with the 01.05.28 and 01.07.28 trading up to hit intraday highs of 10.40% and 10.50%, as against intraday lows of 10.30% and 10.45% respectively. The medium tenor 15.03.31 and 01.10.32 maturities were seen trading at the rate of 11.30% and 11.50% respectively.

The details of the next round of Treasury Bond auction, scheduled to be held on the 30th of December, were announced. The round of auctions will have on offer a total amount of Rs 80.00 billion. This will be comprised of Rs 45.00 billion from a 15th of October 2028 maturity bearing a coupon rate of 11.00% and Rs 35.00 billion from a 01st June 2033 maturity bearing a coupon rate of 09.00%. This will be the final bond auction for 2024.

The total secondary market Treasury bond/bill transacted volume for 23rd December was Rs. 11.67 billion.

In money markets, the weighted average rates on overnight call money and Repo stood at 8.00% and 8.13% respectively.

 

The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of a 7-day term reverse repo auctions for Rs 25.00 billion at the weighted average rate of 8.11%.

The net liquidity surplus stood at Rs. 159.37 billion yesterday. Rs 0.50 billion was withdrawn from the Central Banks SLFR (Standing Lending Facility Rate) of 8.50%, while an amount of Rs. 184.87 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 considerably to Rs. 294.00/295.50 as against its previous day’s closing level of Rs. 296.25/296.75.

The total USD/LKR traded volume for 23rd December was US $ 89.30 million.

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