Post-election rally drives continuous buying in secondary market

By First Capital Research

The Central Bank conducted its weekly T-bill auction yesterday, raising Rs.122.7 billion, lower than the initially offered amount of Rs.130.0 billion. 

The weighted average yields for the three-month and 12-month maturities remained unchanged at 7.65 percent and 8.30 percent, respectively, compared to the previous auction, whilst the six-month T-bill saw a marginal 1bps increase to 7.98 percent. 

Following the election, market participants in the secondary market maintained a buying stance, driven by notable trading activity despite moderate volumes. Consequently, the yield curve remained mostly stable. Amongst the traded maturities, at the short end, the 15.01.2027 maturity traded at the rates of 8.85 percent to 8.75 percent, while the 15.02.2028, 15.03.2028, 01.05.2028 and 01.07.2028 maturities traded at the rates of 9.84 percent to 9.70 percent, whilst 01.09.2028, 15.10.2028 and 15.12.2028 traded between the rates of 9.95 percent to 9.85 percent. 

Meanwhile, towards the mid end, 15.07.2029, 15.09.2029 and 15.12.2029 changed hands between 10.38 percent and 10.20 percent. Additionally, the 15.03.2031 and 01.10.2032 maturities traded at the rates of 10.75 percent to 10.70 percent.

In the forex market, the Sri Lankan rupee appreciated marginally against the greenback, closing at Rs.299.49/US dollar, compared to the previous day’s rate of Rs.299.52/US dollar. 

Meanwhile, overnight liquidity in the banking system expanded to Rs.163.5 billion, from Rs.157.3 billion in the previous session.