The secondary market was on mixed sentiment as buying interest emerged during the start of the week whilst selling pressure mounted towards the latter. Moreover, weekly auction yields for 03M and 12M marginally came down to 18.12% and 13.32% respectively, while 06M maturities surged by 19bps to 15.38%.
The secondary market displayed subdued activity whilst, the short end and mid end of the curve displayed slight buying interest mainly on 2026 tenors which traded at 15.00%-14.10% whilst 2027 and 2028 maturities traded between 14.00%-13.55%.
As the week progressed selling pressure surged on 2026 maturities which traded between 14.30%-15.00% while 2028 tenors marginally declined by 5bps. To conclude the week slightly higher quotes were observed on the T-bills after the CBSL increased the cut-off rates at the auction held on 20th Sep-23. Therefore, light activities were observed on the 182-day and 365-day maturities, which traded at 16.00% and 14.00%,.
At the weekly CBSL auction that took place for LKR 170.0Bn, CBSL fully accepted the offered, with majority accepted from the 91-day maturity (with an acceptance rate of 157.0% cf. offered LKR 70.0Bn). Furthermore, despite the higher acceptance, weighted average yields of the 91-day maturity declined by 04bps to 18.12% whilst the 364-day maturity also recorded a slight decline by 03bps to 13.32%. However, despite the relatively higher rate of acceptance compared to the 364-day maturity (74.5% cf. 38.5%, respectively) weighted average yields of the 182-day maturity inclined marginally by 19bps to 15.38%.
In the Forex market, the LKR slightly depreciated with rupee being recorded at LKR 324.0 compared to LKR 323.4 recorded during the beginning of the week.
Courtesy: First Capital Research (Sept.20, 2023)
