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Sri Lanka treasury yields steady, tap open

Jan 30, 2008 (LBO) -- Average yields at a Treasury bill auction remained steady Wednesday but the government was fishing for more cash after the auction, dealers and the debt office said. Treasuries were extensively sold on 'tap' after the auction by the debt office, which is part of the Central Bank, in December 2007, in a bid to avoid sharp spikes in rates.

The 3-month average yield at the auction remained at 19.25 percent from a week earlier, the 6-months at 19.29 percent and the 12-months at 19.45 percent, the debt office said.

The weighted average for all maturities moved up slightly to 19.32 percent from 19.26 percent a week earlier.

The government raised 7.5 billion rupees of and retired the balance of a 9.75 billion rupee maturing bill issue, the debt office said.
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However the bank was in the market to sell more bills at the auction benchmarks later, dealers said.

At the bond auction on Tuesday two year bonds edged up to 18.
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88 percent which was slightly above secondary market yields, indicating that new cash volumes to G-sec markets may have dried up a little in the wake of softer rates in January.

After the auction secondary markets started trading around 19.00 percent up sharply from 18.10/20 percent levels, hurting sentiment somewhat, dealers said.

Secondary market activity in bills was also lower, indicating lower volumes, dealers said.

Colombo stocks closed lower with the All Share Index losing 10.92 points at 2,433.79. The Milanka index shed 28.96 points to close at 3,091.62.

Over 693,000 Dialog Telekom shares changed hands with the share losing 25 cents to close at 18.00 rupees.

Activated carbon manufacturer Haycarb contributed most to the turnover with over 13 million rupees in a day that saw 136.9 million rupees of shares trade. Haycarb closed 50 cents lower at 40.50 rupees.

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