Saturday, October 6, 2012

Secondary market Treasury yields tumble further as CB injects one month funds

Along with the announcement of the term reverse repo auction and its outcome, secondary market Treasury yields dipped further yesterday as yields dipped below 12% for the first time in six months, Wealth Trust Securities said.

The Open Market Operations (OMO) department of the Central Bank conducted a one month reverse repo auction for an amount of Rs. 8 billion and accepted the same amount at a weighted average of 9.81%.

 Activity was witnessed on all maturities ranging from the 1¼-year bond to the six-year bond as volumes traded were very high once again.

 The three-year, five-year and six-year maturities were the more active three durations as its yields open the day at levels of 12.10%, 12.25% and 12.40% respectively and dropped down to intraday lows of 11.70%, 11.80% and 11.90%. Profit taking at these levels saw the counters edge up once again by around 10 basis points towards the latter part of the day.

 Meanwhile, in money markets, Wealth Trust said overnight liquidity remained at a net deficit of Rs. 7.5 billion yesterday as was the story throughout the week as the OMO department pumped in an amount of Rs. 5.7 billion through an overnight reverse repo auction at a weighted average of 9.67%. This in turn helped keep overnight call money and repo rates steady to average 10.55% and 9.67% respectively.

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