Muted trading activity amid T-Bill auction proceedings

By First Capital Research

The secondary market yesterday drifted through a quiet session amidst the scheduled T-Bill auction, at which the amount raised fell marginally short of the initial offer. Investor participation remained limited, in the secondary market resulting in low trading volumes, while some selling pressure was observed at the shorter end of the yield curve.

Yesterday’s transactions included several 2028 maturities including, 15.02.2028, 01.07.2028, 15.10.2028, and 15.12.2028, all of which traded within a yield range of 9.20% to 9.40%. Additionally, the 15.06.2029 and 15.12.2029 maturities traded between 9.60% and 9.85%. The 15.10.2030 maturity traded at 9.95%, followed by the 15.03.2031 maturity at 10.20%. Lastly, the 15.06.2035 maturity changed hands within a range of 11.15% to 11.20%.

The PDMO raised a total of Rs. 96.4bn against the offered amount of Rs. 100.0bn at yesterday’s T-Bill auction, despite total bids amounting to Rs. 347.3bn. Of this, Rs. 32.0bn was raised via the 3-month bill, in line with the amount offered, with the yield increasing by 7bps to 7.95%.

The 6-month bill raised Rs. 62.3bn against an offer of Rs. 48.0bn, while the yield remained unchanged at 8.44%. Lastly, Rs. 2.1bn was raised against an offer of Rs. 20.0bn in the 12-month segment, with the yield edging up by 1bp to 8.48%.

On the external front, the LKR appreciated against the USD, closing at Rs. 309.05/USD compared to Rs. 309.38/USD recorded the previous day. Overnight liquidity in the banking system contracted to Rs. 151.97bn from Rs. 168.89bn recorded previously.