Market stays muted amid T-Bond auction as yields stay flat

By First Capital Research

Amidst the Treasury Bond auction held yesterday, the secondary market remained subdued, reflecting thin trading volumes. 

Yield curve stayed steady across all maturities. Market activity was concentrated towards short and mid-tenor maturities. Over 2029 segment, 15.06.2029, 15.09.2029 and 15.12.2029 traded at 9.50%, 9.56% and 9.60% respectively. 01.03.2030 was seen changing hands at 9.65%. 

At the T-Bond auction, PDMO raised a total of Rs. 87.0bn, compared to the initial offer of Rs. 130.0bn. Both 01.03.2030 and 01.06.2034 maturities raised only a portion amounting to Rs. 17.1bn and Rs. 29.8bn compared to the offers of Rs. 30.0bn and Rs. 60.0bn, while the weighted average yields stood at 9.63% and 10.70% respectively. 

However, 15.08.2036 Bond was accepted in full, amounting to Rs. 40.0bn and the weighted average yield was 10.80%. On the external front, the LKR appreciated against the USD, closing at Rs. 310.95/USD compared to Rs. 311.12/USD recorded the previous day. Liquidity in the banking system expanded to Rs. 409.48bn from Rs. 394.53bn recorded previously.