Market buying spree persists as the yield curve softens

By First Capital Research 

Continuing the previous day’s trend, market participants maintained a buying stance, leading to moderate volumes and activity yesterday. 

Notably, demand was concentrated in the 2028 and 2029 bond maturities, which became the focal point of investor interest. Consequently, the yield curve eased across the board. Additionally, CBSL advanced its third monetary policy review for the year, rescheduling it from 28th May 2025 to 22nd May 2025.

Amongst the traded maturities, 15.02.2028, 15.03.2028 and 01.07.2028 maturities traded at the rates of 9.67%, 9.70% and 9.75%, respectively whilst both 15.10.2028 and 15.12.2028 traded at the rate of 9.85%. 

Meanwhile 15.06.2029, traded at the rate of 10.13% and both 15.09.2029 and 15.12.2029 bond maturities traded at the rate of 10.15%. Additionally, 15.03.2031 maturity changed hands at the rate of 10.65% whilst 15.12.2032 traded at the rate of 10.75%.

In the forex market, the LKR continued to appreciate against the greenback, closing at Rs. 298.7/USD, compared to the previous day’s rate of 298.9/USD. Meanwhile, overnight liquidity in the banking system contracted to Rs. 123.8bn from Rs. 183.1bn in the previous session.