Market maintains moderate activity whilst T-Bond acceptances fall short

By First Capital Research

The secondary market remained subdued yesterday as investor engagement remained limited with some selling sentiment, amidst moderate trading volumes. 

Trading activity was primarily confined to the short to mid end of the curve, with 2028, 2029 and 2031 bonds seeing some activity. 

Among the 2028 maturities, 15.02.2028 traded between 9.10% to 9.15%, followed by 01.05.2028, 01.07.2028, 15.10.2028, all of which traded between 9.15% to 9.20%. 

Moving along, the 15.06.2029 bond changed hands at 9.45% whilst 15.09.2029 and 15.10.2029 maturities traded within a yield band of 9.45% to 9.55%. Lastly, the 15.03.2031 maturity traded at a yield of 9.95%. 

The CBSL conducted a T-Bond auction yesterday, raising Rs. 115.5bn across three maturities against an initial offer of Rs. 143.0bn, despite total bids amounting to Rs. 272.7bn. The 01.03.2030 bond recorded acceptances of Rs. 15.5bn at a yield of 9.55%, while the 01.10.2032 bond saw Rs. 30.0bn accepted which is in line with the initial offer, at a yield of 10.29%. The 15.06.2035 bond was also accepted in full against the initial offer of Rs. 70.0bn, with the yield settling at 10.67%.

On the external front, the LKR slightly depreciated against the USD, closing at Rs. 308.75/USD compared to Rs. 308.65/USD seen previously. Overnight liquidity in the banking system expanded to Rs. 109.5mn from Rs. 97.8mn recorded on the previous day.