Secondary market activity surges on pre-auction buying interest

By First Capital Research

The secondary market extended the positive sentiment observed in previous sessions, with the investors maintaining strong buying interest ahead of yesterday’s T-bill auction, resulting in a broad-based easing of yields. 

Following the auction, mild selling interest emerged, however, market activity and trading volumes remained elevated throughout the session, reflecting sustained investor participation.

At the short end of the curve, the 01.05.2027 and 15.09.2027 maturities traded from 10.55 percent to 10.35 percent. Moving on to the 2028 segment, the 15.02.2028 maturity traded at 10.55 percent, followed by the 01.05.2028, 01.07.2028 and 15.10.2028 maturities, all trading from 10.75 percent to 10.65 percent. 

The 15.12.2029 bond changed hands from 11.10 percent to 11.00 percent and within the 2030 segment, the 01.03.2030, 15.05.2030 and 01.08.2030 maturities traded from 11.50 percent to 11.05 percent. 

Moving further along the belly end, the 01.12.2031 maturity traded at 11.75 percent, the 15.12.2032 maturity traded from 11.60 percent to 11.45 percent and within the 2033 segment, maturities dated 15.01.2033 and 01.06.2033 traded from 11.65 percent to 11.50 percent. 

The 15.06.2034 bond traded at 11.80 percent, followed by the 15.03.2035 bond from 12.00 percent to 11.77 percent and lastly, the 15.08.2036 bond traded at 11.90 percent. 

The PDMO successfully raised the full offered amount of Rs.70.0 billion, attracting total bids of Rs.129.4 billion. Of the amount raised, Rs.51.6 billion was accepted in the three-month tenure, Rs.8.7 billion in the six-month tenure and Rs.9.6 billion in the 12-month tenure.

The weighted average yield on the three-month bill declined by 7bps to 10.02 percent, while the six-month bill yield fell by 11bps to 10.16 percent, whilst the 12-month bill yield remained unchanged at 10.16 percent.

On the external front, the Sri Lankan rupee depreciated against the US dollar, standing at Rs.334.58/US dollar, compared to Rs.331.59/US dollar seen earlier. 

Liquidity in the banking system expanded marginally to Rs.43.19 billion, from Rs.40.07 billion recorded previously.