Investors stay on sidelines ahead of T-bond auction

By First Capital Research

Investor caution persisted in the secondary market, as the participants awaited direction from the today’s T-bond auction. 

Limited trading activity was seen, while the weighted average yields edged higher at yesterday’s T-bill auction. 

Over the 2029 segment, 15.09.2029, 15.10.2029 and 15.12.2029 traded between 12.00 percent-12.15 percent. Additionally, the 01.08.2030 maturity changed hands at 12.25 percent. 

At the T-bill auction, the PDMO raised only a portion, amounting to Rs.71.7 billion, compared to the initial offer of Rs.140.0 billion. 

The three-month bill raised Rs.56.6 billion, falling short of its offer of Rs.65.0 billion, while six-month and 12-month maturities raised Rs.8.9 billion and Rs.6.2 billion, compared to the offered amounts of Rs.55.0 billion and Rs.20.0 billion, respectively. 

The weighted average yields edged up across the board, with the three-month yield edging up 25bps to settle at 10.09 percent, the six-month yield edging up 26bps to 10.27 percent and the 12-month bill edging up 14bps to 10.16 percent.

On the external front, the Sri Lankan rupee depreciated against the US dollar, standing at Rs.337.63/US dollar, compared to Rs.336.82/US dollar seen earlier. 

Liquidity in the banking system contracted to Rs.57.38 billion, from Rs.69.18 billion recorded previously.