Mixed sentiment resumes amidst T-bond auction

By First Capital Research

The secondary market demonstrated mixed sentiment amidst moderate activity levels, leaving the yield curve largely stationary. 

The Central Bank conducted the first T-bond auction for the month, at which Rs.80.0 billion was raised, in line with the initial offer. A reasonable level of trades was executed across the yield curve yesterday. Amongst the 2028 maturities, the 15.03.2028 bond traded at 8.90 percent followed by the 01.05.2028 bond at 8.95 percent. 

Maturities dated 01.07.2028, 01.09.2028 and 15.10.2028 traded at 9.00 percent. Moving towards the mid end of the curve, the 15.09.2029, 15.10.2029 and 15.12.2029 bonds traded at yields of 9.45 percent, 9.40 percent and 9.45 percent, respectively. The 01.07.2030 maturity traded at 9.56 percent, followed by the 15.03.2031 maturity at 9.80 percent and the 01.07.2032 maturity at 10.30 percent. 

Furthermore, the bonds maturing on 01.10.2032 and 15.12.2032 traded at a yield of 10.20 percent. Within the 2033 segment, the bonds maturing on 01.06.2033 and 01.11.2033 traded at 10.40 percent. Lastly, towards the long end of the curve, the 15.06.2035 maturity was seen changing hands at 10.70 percent.  The Central Bank conducted a T-bond auction yesterday, at which the full amount on offer was raised across two maturities. As per the initial plan, Rs.35.0 billion was raised through the 2030 maturity and Rs.45.0 billion was raised through the 2035 maturity. The weighted average yields of the maturities stood at 9.56 percent and 10.69 percent, respectively.

On the external front, the Sri Lankan depreciated against the US dollar, closing at Rs.304.52/US dollar, compared to Rs.304.28/US dollar seen previously. Overnight liquidity in the banking system expanded to Rs.162.43 billion, from Rs.146.61 billion recorded on the previous day.