Yields edge down amid tepid volumes

By First Capital Research

CBSL conducted its weekly T-Bill auction yesterday, raising Rs. 145.0bn in line with the initial offering. 

Of this, Rs. 11.4bn was raised via 3M T-Bills, while 6M and 12M T-Bills secured Rs. 70.0bn and Rs. 63.6bn, respectively. 

The weighted average yield for the 3M maturity rose by 3bps to 7.65%, while the 12M T-Bill saw a marginal 1bps increase to 8.30%. Meanwhile, the 6M T-Bill dipped by 1bps to 7.97%.

Activity in the secondary market remained subdued, with thin trading volumes observed amid a notable undercurrent of buying interest. This prompted a slight downward adjustment in the yield curve.Consequently, the 15.03.2028 maturity traded at 9.90% while the 15.10.2028 and 15.12.2028 maturities both traded at 10.00%. Further along the curve, the 15.06.2029 maturity traded at 10.30%, followed by the 15.12.2029 maturity which traded higher at 10.40%. Finally, the 15.05.2030 maturity traded at 10.45% and the 15.03.2031 maturity changed hands at 10.90%.

In the forex market, the LKR showed signs of a subtle strengtheningagainst the greenback, closing at Rs. 299.66/USD, compared to the previous day’s rate of 299.70/USD. Meanwhile, overnight liquidity in the banking system registered a feeble uptick, rising to Rs. 145.5bn, from Rs. 144.0bn in the prior session.