Yields trend further down, while activity stays soft

By First Capital Research

The secondary market yield curve continued its downward drift, driven by renewed buying interest, especially evident in the lead-up to yesterday’s T-Bond auction. Despite this momentum, trading volumes remained relatively subdued.

On the short end of the yield curve, 15.01.2028, 15.02.2028, 15.03.2028, 01.07.2028 and 15.10.2028 maturities traded between 8.83% to 8.70%. In terms of 2029 maturities, 15.06.2029, 15.09.2029 and 15.12.2029were seen trading within the 9.40%-9.35% range. Finally, moving ahead on the yield curve, the 15.09.2034 maturity traded at 10.40%. 

CBSL conducted a T-Bond auction yesterday, which saw the initially offered amount of Rs. 200.0bn was fully raised. This amount was raised through the issuance of 2028, 2029 and 2034 maturities which registered weighted average yields of 8.85%, 9.47% and 10.46% respectively. 

In the forex market, the LKR appreciated marginally against the greenback, closing at Rs. 299.67/USD, compared to the previously seen rate of 299.69/USD. 

Meanwhile, overnight liquidity in the banking system expanded to Rs. 207.9bn from Rs. 196.1bn in the previous session.