Yield curve edges up amidst minimal trading activity

By First Capital Research

Trading activity in the secondary market yesterday was limited with thin volumes, while the yield curve slightly edged up across the board. 

Over 2030 segment, 01.08.2030 and 15.10.2030 traded at 11.30% and 11.35% respectively. Moving ahead, 01.11.2033 changed hands at 11.70% and both 15.06.2034 and 15.03.2035 traded at 11.80%. 

At the weekly Treasury bill auction, the Public Debt Management Office successfully raised the full initial offer of Rs. 100.0bn.Acceptances on the 3M maturity totaled Rs. 58.5bn, higher than the initial offer of Rs. 50.0bn. 

While the 6M maturity was accepted equivalent to the offer of Rs. 35.0bn, only a portion of the 12M bill was accepted amounting to Rs. 6.5bn compared to its offer of Rs. 15.0bn. The weighted average yield on the 3M bill decreased by 2bps to 10.21%, while the 6M bill stood flat at 10.30% and the 12M bill edged up by 1bp to 10.21%.

On the external front, the LKR appreciated against the USD, standing at Rs. 334.71/USD, compared to Rs. 334.95/USD seen earlier. Liquidity in the banking system contracted to Rs. 125.89bn from Rs. 134.77bn recorded previously.