The secondary market exhibited mixed sentiment during the week, with active trading observed in the short to mid tenors. However towards the end, the market displayed buying interest fueled by optimism surrounding Sri Lanka’s debt restructuring deal with official creditors, led to a significant decrease of over 20bps in short to mid tenor yields.
At the last monetary policy meeting for the year held on 23rd Nov 2023, the Central Bank of Sri Lanka. decided to reduce the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank by 100bps to 9.00% and 10.00%, respectively after thoroughly examining the present and anticipated trends in both the domestic and global economy.
As the bond auction, CBSL raised Rs. 45.0Bn and accepted the total offered with Rs. 22.5Bn accepted from each maturity. Accordingly, 15.01.2027 was accepted at a WAYR of 14.48% while 01.09.2028 was accepted at 14.52%.
The CBSL conducted its weekly bill auction and fully accepted the total offered of Rs. 160.0 bn, while auction yields edged down across the board.
The 91-day and 182-day maturities experienced higher reception with CBSL accepting Rs. 60.8Bn for the 91-day maturity (surpassing the total offered of Rs. 60.0Bn) at 14.86% (-43Bps) and Rs. 87.7bn for the 182-day maturity (above the total offered of Rs. 70.0Bn) at 14.52% (-23Bps). Rs. 11.5 bn was accepted from the 364-day maturity at a weighted average yield of 12.89% (-05Bps).
In the Forex market, the rupee depreciated against the USD with rupee being recorded at Rs. 329.5 compared to Rs. 328.5 recorded during the beginning of the week.
Courtesy: First Capital Research (Nov. 28, 2023)
