Auction yields take upward turn across board

By First Capital Research
The secondary market displayed buying interest during the early hours of trading, primarily at the short-end of the curve, with short tenures, including 01.02.26, 01.06.26 and 01.08.26 trading within the range of 10.60 percent-10.80 percent, whilst the bonds maturing on 01.05.27 and 15.09.27 traded between 11.70 percent and 11.80 percent.   Subsequently, following yesterday’s weekly Treasury bill (T-bill) auction, a shift in market sentiment was observed, leading to selling interest in the secondary market. 
Notably, the liquid maturities, including 01.08.26 and 01.05.27, traded at 10.95 percent and 11.90 percent, respectively, whilst 15.09.27 hovered in the range of 11.85 percent-11.95 percent. Moreover, at the mid-end of the curve, 01.07.28 traded at 12.25 percent.
Meanwhile, at the T-bill auction, the Central Bank fully accepted the total offered of Rs.160.0 billion, whilst the auction yields slightly increased across the board. 
The 91-day maturity experienced higher reception, with the Central Bank accepting Rs.64.7 billion (surpassing the total offered of Rs.40.0 billion), at 9.96 percent (+09bps), whilst Rs.52.8 billion was accepted for the 182-day maturity (below the total offered of Rs.60.0 billion), at 10.08 percent (+13bps) and Rs.42.5 billion was accepted for the 364-day maturity (below the total offered of Rs.60.0 billion), at 10.14 percent (+09bps).  Furthermore, the Central Bank has announced the issuance of Rs.270.0 billion in T-bonds through an auction scheduled on March 12, 2024.

Moreover, the overnight liquidity turned positive during the day, recording a surplus of Rs.55.6 billion, whilst the Central Bank holdings remained stagnant at Rs.2,715.6 billion.   On the external side, the Sri Lankan rupee continued to appreciate against the US dollar for the sixth consecutive session, closing at Rs.307.97 during the day.