Bond auction acceptance falls short

By First Capital Research 

Reflecting Monday’s muted tone, the secondary market yield curve showed mixed movements amid light trading volumes.

Amongst the traded maturities, at the shorter end of the yield curve, the 01.09.2027 maturity saw trade executed at 8.50%, while the 15.06.2029, 15.09.2029 and 15.12.2029 traded at the rates between 9.30% to 9.39%. 

Meanwhile, 01.07.2030, maturity traded at the rate of 9.45%. Furthermore, 15.03.2031 maturity was traded between rates of 9.80% to 9.85% and 15.12.2032 maturity traded at the rates of 10.20% to 10.25%. 

Meanwhile, the Central Bank of Sri Lanka concluded yesterday’s scheduled treasury bond auction, raising only a portion of the targeted Rs. 65.0bn. The initial plan aimed to raise Rs. 40.0bn through a 2032 maturity bond carrying an 8.00% coupon, and Rs. 25.0bn via a 2035 maturity bond with a 10.70% coupon. However, only Rs. 18.5bn was accepted from the 2035 bond, while the 2032 bond didn’t see any acceptance. 

In the forex market, the LKR appreciated slightly against the greenback, closing at Rs. 300.67/USD, compared to the previously seen rate of Rs. 300.81/USD. 

Meanwhile, overnight liquidity in the banking system contracted to Rs. 97.89bn from the previously seen level of Rs. 110.68bn.