The secondary market exhibited a discernible shift as yields declined across the board, attributed to selling pressure stemming from the treasury buyback auction, a notable 1.6% growth in GDP during 3Q2023, and an optimistic sentiment instigated by the IMF approval of the 2nd tranche.
Toward the close of the week, trading activities took on a subdued tone, with volumes reaching exceptionally low levels.
Additionally, at the short end of the curve, 2026 maturities hovered between 13.85%-13.75%, whilst at the mid-end, 2027 maturities fluctuated in the range of 13.95%-13.85%. CBSL held its treasury buy back auction, where 15.05.26 tenor was accepted at 13.71% where only Rs. 1.0Bn was accepted out of Rs. 10.0 Bn offered. Furthermore, 01.08.26 tenor was accepted at 13.73% whilst Rs. 500.0Mn was accepted out of Rs. 10.0 Bn offered. CBSL conducted its weekly T-Bill auction and accepted only Rs. 156.2Bn, accounting for 91% of the total offered of Rs. 172.5Bn.
However, 03M and 06M bills experienced an exceptionally higher reception with both notching an over subscription by 25% and 27%. Weighted average yield of 03M marginally edged down to 14.57% (-2bps) while 06M narrowed down to 14.24% (-5bps).
Conversely, 1Yr maturity was undersubscribed while the weighted average yield rate adjusted upwards by 10bps to 12.93%.
In the Forex market, the Rupee slightly depreciated against the USD with rupee being recorded at Rs. 327.0 compared to Rs. 326.8 recorded during the beginning of the week.
Courtesy: First Capital Research (December 20, 2023_
