Yield curve sees mixed activity and heavy volumes amidst foreign selling

By First Capital Research

The secondary market yield curve showed mixed activity throughout the day. 

The morning session saw buying interest, yet selling pressure emerged towards the latter part of the day keeping the yield curve stable despite heavy trading volumes and activity. Foreign selling was also observed during the session.

Regarding traded maturities, 15.02.2028, 01.07.2028 and 15.10.2028 traded at the rates between 9.30 percent and 9.50 percent. 15.06.2029, 15.09.2029, 15.10.2029 and 15.12.2029 were traded at the rates between 9.65 percent to 9.85 percent. Further along the curve, the 01.03.2030 maturity traded between 9.70 percent and 9.80 percent, while the 15.03.2031 bond yielded 9.85 percent to 10.00 percent. 

The 15.12.2032 maturity was traded at 10.60 percent. Additionally, 01.06.2033 and 01.11.2033 traded within the range of 10.72 percent to 10.92 percent and the 15.06.2035 maturity yielded between 10.97 percent and 11.05 percent.

At the weekly T-bill auction, the PDMO raised Rs.34.9 billion, falling short of the total offered amount of Rs.80 billion. The three-month, six-month and 12-month maturities raised Rs.14.8 billion, Rs.7.4 billion and Rs.12.6 billion. 

Meanwhile, the weighted average yields across all three tenures increased by 3bps, 4bps and 9bps, respectively to 7.64 percent, 7.95 percent, and 8.32 percent, for the three-month, six-month and 12-month maturities.

On the external front, the Sri Lankan rupee depreciated against the US dollar, closing at Rs.314.22/US dollar, compared to Rs.312.96/US dollar recorded previously. Liquidity in the banking system contracted marginally to Rs.298.34 billion, from Rs.309.71 billion recorded previously.