Muted market participation with selective interest at short and long ends

By First Capital Research

The secondary government securities market remained subdued yesterday, with limited trading activity and low volumes, with some selling pressure observed at the short end of the yield curve.

Within the short-term segment, 15.09.2027 was quoted at a yield of 8.85%. In the 2028 segment, both the 15.10.2028 and 15.12.2028 maturities were transacted at a yield of 9.25%.

Progressing to the 2029 segment, 15.06.2029, 15.09.2029, 15.10.2029, and 15.12.2029 were traded within a yield range of 9.60% to 9.81%. The 01.07.2030 maturity was also traded, closing at a yield of 9.76%.At the longer end of the curve, selective buying interest emerged in the 15.09.2034 security, which was traded at a yield of 10.80%.

On the external front, the LKR appreciated slightly against the USD, closing at Rs. 302.52/USD, compared to Rs. 302.62/USD recorded the previous day. Overnight liquidity in the banking system expanded to Rs. 172.2bn from Rs. 169.0bn recorded the previous day.