2039 maturity fully rejected at latest T-Bond auction

By First Capital Research 

Yesterday the PDMO concluded a T-Bond auction which saw 2030, 2034 and 2036 maturities being accepted at weighted average yields that closely mirror the prevailing market rates, in turn pushing the yield curve down from the short to mid-end. However, the 2039 maturity which was set to raise Rs. 50.0bn was fully rejected. 

Among the traded maturities, 15.12.2028 traded at 9.75% while 15.06.2029 changed hands at 9.80%. Moving ahead, 01.07.2030 and 01.08.2030 traded at 10.05% and 10.10% respectively. 15.12.2032 maturity was observed trading at 10.80% and 15.06.2034 changed hands between 11.20% to 11.10%. 

At the T-Bond auction held yesterday, 2030 and 2034 maturities were fully accepted, both collectively raising LKR 130.0Bn. The weighted average yields for these maturities stood at 10.16% and 11.24% respectively. 

Only Rs. 24.5bn of the 2036 maturity was accepted, which had an initial offer of Rs. 70.0bn while the weighted average yield stood at 11.40%. Finally, the 2039 maturity, which offered Rs. 50.0bn and bore a coupon of 10.50% was fully rejected. 

On the external front, the LKR depreciated against the USD, standing at Rs. 322.03/USD, compared to Rs. 321.87/USD seen previously. Overnight liquidity in the banking system contracted to Rs. 247.19bn from Rs. 262.96bn recorded previously.