Sentiment stabilizes amid signs of geopolitical de-escalation

By First Capital Research

The secondary market witnessed some cautious buying activity yesterday, deviating from yesterday’s selling pressure. 

Following the looming possibility of a de-escalation of geo-political tensions and the subsequent moderation in oil prices witnessed, investors appeared to have shifted gear, although trading volumes remained moderate. 

At the short end of the curve 15.02.2028 traded at 9.10% while 15.09.2029 was seen trading at 9.55%. Moving ahead, 01.03.2030 and 15.05.2030 both traded at 9.65% and 01.10.2032 changed hands between the narrow range of 10.23% and 10.25%. 

Further along the yield curve 01.06.2033 and 01.11.2033 traded between 10.50% and 10.60%. Finally, 15.06.2034 traded at 10.75% and 15.06.2035 changed hands at 10.85%. 

The PDMO also announced that Rs. 130.0bn is set to be raised through a T-Bond auction scheduled for the 12th of Mar-2026. Rs. 30.0bn would be raised through a 2030 maturity with a coupon of 9.50% while Rs. 60.0bn and Rs.40.0bn would be raised through 2034 and 2036 maturities bearing coupons of 10.75% and 10.85% respectively. 

On the external front, the LKR depreciated against the USD, closing at Rs. 311.73/USD compared to Rs. 311.34/USD recorded the previous day. Overnight liquidity in the banking system expanded marginally to Rs. 410.36bn from Rs. 409.72bn recorded previously.