Yield curve steady amid tepid secondary market activity

By First Capital Research 

The secondary market withstood a lacklustre trading session yesterday, marked by low volumes while the yield curve remained broadly unchanged. 

Activity was largely concentrated in the 2030 segment, though the volumes traded appeared modest. 

The 15.03.2030 maturity traded at 11.33 percent, the 01.07.2030 and 01.08.2030 maturities both traded at 11.50 percent, while the 15.10.2030 maturity traded at 11.60 percent, with the yields broadly unchanged from the previous levels. 

Further along the yield curve, 01.11.2033 traded at 11.95 percent. Within the 2034 segment, 15.06.2034 and 15.10.2034 both changed hands at 12.10 percent. Finally, at the long end of the curve, 01.07.2037 was seen trading at 12.65 percent. 

The PDMO concluded its weekly T-bill auction yesterday, raising Rs.120.0 billion, on par with the initial offer. 

The three-month T-bill raised Rs.55.0 billion, while the six-month and 12-month raised Rs.35.0 billion and Rs.30.0 billion, respectively, all in line with the initial offer amounts. 

The weighted average yields dipped across all three maturities. The weighted average yield of the three-month bill edged down by 8bps to 10.13 percent, while that of the six-month and 12-month bills edged down by 3bps and 1bps to stand at 10.27 percent and 10.20 percent, respectively.

On the external front, the Sri Lankan rupee depreciated marginally against the US dollar, standing at Rs.336.28/US dollar, compared to Rs.336.22/US dollar seen earlier. 

Overnight liquidity in the banking system expanded to Rs.157.19 billion, from Rs.151.99 billion recorded previously.

Popular maturities traded: 

01.08.2030

15.10.2030