By First Capital Research

The secondary market yield curve edged down on the belly of the curve, as the mid tenures continued to attract interest during the day while the long tenures did not trade mostly. 

The 2027 and 2028 mid tenures witnessed higher demand, resulting in a 10-15bps decline at yesterday’s trading session. Accordingly, the 2027 maturities: 01.05.2027, 15.12.2027 and 15.09.2027 registered transactions at 11.20 percent. Several maturities from the 2028 tenures also observed trades.

Accordingly, 15.02.2028 and 15.03.2028 closed trades at 11.45 percent whilst 01.05.2028 and 01.07.2028 closed trades at 11.50 percent. Moreover, 15.12.2028 too registered trades at yesterday’s session at 11.63 percent. Meanwhile, 15.09.2029 and 15.05.2030 also witnessed buying at 11.70 percent and 12.00 percent, respectively.

On the external side, the Sri Lankan rupee appreciated against the greenback, closing at Rs.292.9/US dollar, compared to the previous day’s closing of Rs.293.1/US dollar. Similarly, the rupee appreciated against the other major currencies, including the GBP, EUR, JPY and AUD. Meanwhile, overnight liquidity closed at Rs.165.31 billion and the Central Bank holdings remained stagnant at Rs.2,515.6 billion. The AWPR for the week ending October 11 saw an uptick of 12bps, registering at 9.25 percent compared to the previous week’s closing of 9.13 percent. Moreover, foreign-held outstanding stock of government securities inclined by 15.6 percent week-on-week, indicating a positive momentum in foreign interest.