Secondary market records moderate activity ahead of monetary policy announcement

By First Capital Research

Ahead of today’s monetary policy announcement and T-bill auction, the secondary bond market recorded moderate trading activity yesterday, as investors positioned cautiously prior to key events. 

Foreign buying interest remained concentrated in the 2030 maturities, while local selling pressure was evident in the 2031 maturities. Against this backdrop, yields at the belly end of the curve, particularly in the 2031 and 2034 maturities, increased by around 15bps.

Among the actively traded securities, the 15.09.2029 maturity traded at 11.15%. The 15.10.2030 maturity, which saw notable foreign buying interest, traded within a range of 11.65%–11.60%. In the 2031 segment, the 15.03.2031, 15.05.2031, and 01.12.2031 maturities traded between 11.95% and 12.01%. In the 2032 segment, the 01.07.2032, 01.10.2032, and 15.12.2032 maturities traded in the 12.00%–12.10% range. Meanwhile, the 15.06.2034 maturity traded at 12.25%.

On the external front, the LKR slightly depreciated against the USD, standing at Rs. 336.27/USD, compared to Rs. 336.23/USD seen earlier. Overnight liquidity in the banking system marginally contracted to Rs. 162.36bn from Rs. 168.13Bn recorded previously.

Popular maturities: 15.10.2030 (unchanged).