Market holds steady ahead of today’s T-bond auction

By First Capital Research
The secondary market remained subdued yesterday as investors adopted a wait-and-see approach ahead of today’s bond auction, which also marks the first bond auction following the recent severe weather-related disruptions in the country. 
As a result, trading activity was muted and the yield curve held steady throughout the day.
At yesterday’s treasury bill auction, the Central Bank of Sri Lanka fully accepted bids up to the initially offered amount of Rs.48.0 billion. The three-month bill raised Rs.10.6 billion, with the weighted average yield holding steady at 7.51 percent. The six-month and 12-month maturities garnered Rs.32.9 billion and Rs.4.5 billion, respectively, while their weighted average yields remained unchanged at 7.91 percent and 8.03 percent.
On the external front, the Sri Lankan rupee slightly depreciated against the US dollar, closing at Rs.308.65/US dollar, compared to Rs.308.61/US dollar seen previously. Overnight liquidity in the banking system contracted to Rs.97.8 million, from Rs.101.4 million recorded on the previous day.