Post bond auction yields decline across the board

By First Capital Research

CBSL conducted the second bond auction for the month where the bond auction saw increased levels of demand and buying interest on 2029 and 2033 maturities which were fully subscribed as the CBSL raised a total of Rs. 40.0bn, yielding full acceptance across both maturities. 

The 2029 maturity was fully subscribed to where Rs. 25.0bn was accepted, and the total bids offered were Rs. 25.0bn. The 15.12.29 bond closed at a weighted average yield rate of 10.73%. 

Additionally, the 2033 maturity was also fully accepted with Rs. 15.0bn being accepted from the total offered amount of Rs. 15.0bn. The 01.06.2033 bond closed at a weighted average yield rate of 11.47%.

Mixed trading activity continued during today’s session, with investors showing predominant buying interest. Following the bond auction, yields dropped across the board.

Amongst the traded maturities, at the short end, 15.12.26, 01.05.27, 15.09.27 traded at 9.10%, 9.45% and 9.60% respectively whilst 2028 bonds namely, 15.01.28, 15.02.28 and 15.03.28 traded at 10.10%. 

Furthermore, 01.05.28, 01.07.28, 15.10.28 and 15.12.28 traded at the rates of 10.15%, 10.20%, 10.28% and 10.37%. Additionally, 2030 and 2032 bonds namely, 15.10.30 and 01.07.32 traded at the rates of 11.17% and 11.48%. 

On the external front, the LKR appreciated against the USD closing at Rs. 296.5/USD compared to Rs. 297.9/USD recorded the previous day. CBSL holdings of government securities remained unchanged, closing at Rs. 2,511.92bn yesterday. Overnight liquidity in the banking system expanded to Rs. 194.56bn from Rs. 184.05bn recorded the previous day.