Market commences week with thin volumes ahead of auctions

By First Capital Research

The secondary market yield curve commenced the week with limited activity and thin trading volumes. 

Mixed sentiment prevailed amidst some buying and selling interest, ahead of the treasury bill and bond auctions, where Rs.27.5 billion is to be raised in T-bonds, at the auction scheduled for February 27, 2025. 

Amongst the traded maturities, notable trades were amongst the 2027, 2028, 2029 and 2030 maturities. On the short end of the curve, 01.05.27 traded at a rate of 9.20 percent. On the belly end of the curve, 15.02.28, 15.03.28, 01.05.28 and 01.07.28 traded at rates of 10.00 percent, 10.05 percent, 10.10 percent and 10.22 percent, respectively. 

Similarly, the 15.09.29 maturity traded at a rate of 10.80 percent. 15.05.30 and 15.10.30 traded at rates of 11.00 percent and 11.15 percent, respectively. 

On the external front, the Sri Lankan rupee appreciated against the US dollar, closing at Rs.295.9/US dollar, compared to Rs.296.5/US dollar recorded the previous day. The Central Bank holdings of government securities remained unchanged, closing at Rs.2,511.92 billion yesterday. Overnight liquidity in the banking system expanded to Rs.159.65 billion, from Rs.150.59 billion recorded the previous day.