Lacklustre mode extends ahead of primary auctions

By First Capital Research

The secondary market yield curve remained broadly unchanged during the day amidst toned-down market activities. 

The investors continued to hold their stance on the sidelines anticipating the outcome of today’s T-bond auction. 

However, slim selling pressure emerged on the short to mid tenures, continuing the trend of the previous session. 

Accordingly, on the short end, 15.05.2026 recorded transactions at 10.45 percent level while on the 2027 tenure, 01.05.2027 closed at 11.50 percent and 15.12.2027 hovered within a range of 11.75 percent-11.85 percent. 

On the mid of the curve, 15.02.2028 enticed trades at 11.90 percent. Today’s Rs.200.0 billion worth T-bond auction remains crucial in determining investor sentiment in the days ahead. 

On the external side, the Sri Lankan rupee appreciated against the US dollar, recording at Rs.303.2. 

Moreover, the Central Bank recorded a net sale of dollars amounting to US $ 57.0 million with US dollar purchases remaining null during the month of June 2024. 

Meanwhile, the AWPLR for the week ending July 26, 2024, was registered at 8.81 percent, down by 31 basis points (bps) on a week-on-week basis. As at June, the AWLR too recorded a decline of 34bps, closing at 12.47 percent (cf. 12.81 percent in May 2024) further narrowing the spread between the prime lending rate and lending rate.