Secondary market activity picks up following policy announcement

By First Capital Research

The secondary market experienced a mixed sentiment whilst the overall activity picked up relative to the previous sessions, although the volumes remained moderate. 

This came in the wake of the Monetary Policy Board’s decision to keep the OPR unchanged at 7.75 percent, citing alignment with the 5 percent inflation target amid the domestic and global conditions.

Amongst the trades seen yesterday, 01.05.2026 and 01.08.2026 bonds were seen trading within 8.15 percent-8.20 percent, whilst the 15.01.2027 maturity traded at 8.30 percent, followed by the 01.05.2027 maturity, which traded within the 8.60 percent-8.65 percent range. 

Within the 2028 segment, the 15.02.2028 and 15.03.2028 bonds traded at the narrow range of 8.93 percent-8.95 percent. Moving along the curve, the 01.07.2030 maturity traded at 10.71 percent, whilst the 01.10.2032 maturity traded between 10.40 percent-10.41 percent and the 15.12.2032 maturity traded between 10.35 percent-10.45 percent. 

Finally, the 01.06.2033 bond changed hands at 10.73 percent. The Central Bank’s weekly T-bill auction took place yesterday where a sum of Rs.34.4 billion was accepted, despite the total bids reaching Rs.69.3 billion. The amount raised also fell short of the initially offered Rs.38.0 billion.  For the three-month maturity, Rs.3.2 billion was accepted; the six-month bill saw the largest uptake with Rs.29.1 billion, while the 12-month maturity recorded Rs.1.9 billion. The weighted average yields across all three tenures remained unchanged.  On the external front, the Sri Lankan rupee depreciated against the US dollar, closing at Rs.302.53/US dollar, compared to Rs.302.41/US dollar recorded the previous day. The overnight liquidity in the banking system slightly expanded to Rs.136.6 billion, from Rs.135.4 billion recorded the previous day.