Secondary market sees renewed activity, yield curve edges higher

By First Capital Research 

The secondary market bustled with activity yesterday, breaking the cycle of lethargy that was observed yesterday and through the previous week. 

Following an escalation in geopolitical tensions on Monday, investor activity picked up sharply, resulting in elevated trading volumes. The secondary market saw noteworthy selling pressure which prompted an upward adjustment of the yield curve. 

At the short end of the curve, 15.02.2028, 15.05.2028, 01.07.2028 and 15.10.2028 traded at 9.53%, 9.75%, 9.83% and 9.85% respectively. In terms of 2029 maturities, 15.06.2029 traded at 10.05% and 15.12.2029 traded at 10.10%. Moving ahead, 15.05.2030 was seen changing hands at 10.23% while 01.07.2030 traded slightly lower at 10.22%. 

Further along the yield curve 15.03.2031 changed hands at 10.27% while 15.12.2032 and 01.06.2033 traded at 10.80% and 11.08% respectively. Finally, 15.06.2034 traded at a rate of 11.24% and 15.09.2034 traded higher at 11.28%. 

On the external front, the LKR appreciatedagainst the USD, standing at Rs. 319.52/USD, compared to Rs. 319.93/USD seen on Monday. Overnight liquidity in the banking system expanded to Rs. 246.30bn from Rs. 226.55bn recorded previously.