The week commenced with subdued sentiment as investors remained on the sidelines due to uncertainties surrounding the upcoming budget and the IMF’s second review. Hence, the secondary market yields remained broadly stable. However, weighted average yields at the weekly T-Bill auction trimmed down across the board, whilst 1Yr T-Bill dropped below 13.00% mark since Apr 2022.
The secondary market displayed a dull performance during the week as investor interest was seen to be toned down while activities were limited. As the week progressed, selling interest emerged on the short to mid-end of the curve. Amongst the traded maturities, 2025 and 2026 tenors hovered in the range of 14.90%-14.95% and 15.10%-15.20%, respectively. On the mid to long tenors, mixed activity was evident on 15.07.29 and 15.05.30 maturities between 14.40%-14.30%.
CBSL conducted its weekly T-Bill auction, expecting to raise Rs. 165.0Bn, but however the auction was slightly undersubscribed despite 03M and 06M gaining an over subscription while 1Yr bill only enticed an acceptance of Rs. 2.4Bn out of the total offered Rs. 30.0Bn. Moreover, weighted average yield rates pared-down on a moderate level with 03M maturity closing at 15.64% (-29bps) and 06M closing at 14.81% (-12bps). However, 1Yr bill declined marginally by only 3bps to and 12.99%.
CBSL also has announced a T-Bond auction worth Rs. 250.0Bn which is scheduled to take place on 13th Nov-23. Accordingly, Rs. 60.0Bn is to be raised from 15.01.2027 maturity while Rs. 110.0Bn and Rs. 80.0Bn is expected to be raised from 15.03.2028 and 15.03.2031 maturities.
In the Forex market, the Rupee appreciated against the USD with rupee being recorded at Rs. 327.1 compared to Rs. 328.0 recorded during the beginning of the week.
Courtesy: First Capital Research (November 8, 2023)
