Auction yields on steady descent

By First Capital Research
The secondary market yield curve experienced a continued dip, reflecting a bullish sentiment as the auction yields sharply decreased in the recent bill auctions. 
With buying interest, short tenures 01.02.26 traded in the range of 10.30 percent-10.20 percent, while 15.05.26 and 01.06.26 hovered between 10.60 percent-10.45 percent and 15.12.26 traded between 10.67 percent-10.60 percent. 
Additionally, the 2027 maturities, including 01.05.27 and 15.09.27, saw slight buying interest, trading between 11.05 percent and 10.90 percent. 
However, 01.05.28 witnessed a slight selling interest at 11.50 percent, while 15.12.28 attracted a buying interest, trading between 11.60 percent and 11.55 percent. On the mid-end of the curve, 15.05.30 traded at 12.10 percent. 
In the primary market, the yields further plunged during yesterday’s bill auction. The total offered T-bill amount of Rs.155.0 billion was fully accepted, with 60 percent being accepted from the six-month T-bill. 

Moreover, the weighted average yields of three-month, six-month and one-year T-bills declined to 9.43 percent (-18bps), 9.76 percent (-13bps), and 9.90 percent (-09bps), respectively.
Meanwhile, the Central Bank announced the issuance of Rs.70.0 billion worth of T-bonds through an auction scheduled for May 13, 2024. This issuance includes Rs.15.0 billion, Rs.25.0 billion and Rs.30.0 billion to be issued under the maturities of 01.05.28, 15.10.30 and 01.10.32, respectively. 
Moreover, foreign reserves increased by US $ 478.0 million to US $ 5.4 billion in April 2024, led by the continuous buying of dollars by the government.