Selling sentiment lingers, but yields hold firm

By First Capital Research

Yesterday, the prevailing selling sentiment in the secondary market continued, with some foreign selling also observed. 

However, the market appeared to absorb these pressures, reflecting a more measured approach to selling rather than any aggressive offloading. 

Market volumes remained subdued, with the upcoming T-Bond auction on the horizon adding a layer of caution among participants.

On the very short end of the yield curve, the 01.02.2026maturity traded at 8.70%. Moving ahead, the 15.09.2027, 15.10.2027 and 15.12.2027 traded at a rate of 10.00%. In terms of 2028 maturities, the 15.02.2028, 15.03.2028 and 01.05.2028 traded between 10.20% and 10.35% while the 01.07.2028 and 15.10.2028 bonds traded between 10.40% and 10.53%. 

Moreover, the 15.09.2029 and 15.12.2029 maturities transacted between 10.80% and 10.85%. Finally, the 15.03.3031 maturity traded at a rate of 11.10%. 

In the forex market, the LKR depreciated against the greenback, ending the day at Rs. 297.5/USD in comparison to Rs. 296.8/USD registered on the previous day. Meanwhile, overnight liquidity in the banking system contracted to Rs. 190.9bn from Rs. 202.9Bn seen previously, while CBSL holdings of government securities remained stagnant.