Light trading persists; mixed interest along yield curve

By First Capital Research

Reflecting the previous day’s subdued sentiment, the secondary market exhibited mixed movements amidst low trading volumes. 

Investor interest was primarily seen in the 2029 and 2032 maturities.

In the 2029 segment, mixed activity was observed with 15.06.2029, 15.09.2029, 15.10.2029 and 15.12.2029 trading within a range of 9.30% to 9.40%. Further along the curve, the 15.05.2030 bond traded between 9.45% and 9.48%, while 15.03.2031 was quoted at 9.85%. Interest in the longer end saw both 01.10.2032 and 15.12.2032 maturities trade in the 10.20% to 10.25% range.

The Central Bank concluded its weekly Treasury Bill auction yesterday, fully raising the initially offered amount of LKR 103.5Bn. The 3M bill generated LKR 5.3Bn, with its weighted average yield decreasing by 1bp to 7.60%. The 6M bill raised LKR 41.5Bn, with its weighted average yield decreasing by 1bp to 7.90%. Meanwhile, the 12M bill drew LKR 56.7Bn, with yield remaining unchanged at 8.03%.

In the forex market, the LKR depreciated slightly against the greenback, closing at LKR 301.0/USD, compared to the previously seen rate of LKR 300.7/USD. Meanwhile, overnight liquidity in the banking system expanded to LKR 108.18Bn from the previously seen level of LKR 97.89Bn.