Limited activity persists amidst thin trading volumes

By First Capital Research
The secondary market yield curve experienced limited activities and thin trading volumes during the day. 
The market experienced slight buying interest across the short to mid-end of the yield curve following last week’s bond auction. However, trading volumes remained low. 
Notable trades displaying buying interest were observed amongst the 2026 and 2027 maturities, where 01.02.26, 15.05.26, 01.06.26 and 15.12.26 traded at rates of 10.50 percent, 11.10 percent - 11.00 percent, 11.10 percent - 11.00 percent and 11.10 percent - 11.00 percent, respectively.
Meanwhile, 15.09.27, and 15.12.27 traded between rates of 11.85 percent - 11.95 percent. On the belly end of the curve, the mid-tenures such as the 2028 and 2029 maturities experienced some interest.
Among the traded maturities, notable trades were 15.03.28, 01.07.28 and 15.12.28 trading at rates between 12.35 percent - 12.65 percent, while 15.06.29 traded at rates between 12.70 percent - 12.80 percent. 
On the external front, the Sri Lankan rupee depreciated slightly against the US dollar, closing at Rs.301.13/US dollar compared to Rs.299.99/US dollar recorded the previous day. 
Meanwhile, the Central Bank holdings of government securities declined to Rs.2,555.62 billion yesterday, compared to Rs.2,575.62 billion recorded the previous day. Overnight liquidity in the banking system contracted to Rs.73.98 billion from Rs.86.66 billion recorded the previous day.