The secondary market showed signs of modest buying interest during the week, marking a shift from the subdued sentiment observed previously. This suggests a potential stabilisation in the market, with most of the interest focused on the short and mid-end of the yield curve. However, participation remained subdued, leading to thin trading volumes.
However, mid-week saw a reversal in sentiment, with profit-taking leading to selling pressure, particularly in the short end of the curve, albeit within a market still characterised by thin trading volumes. Following the T-Bill auction, there was a slight uptick in the short end of the curve, with bills surging higher.
We noted a decrease in private sector credit growth for the first time in seven months, with a decline of Rs. 52.2 bn to Rs. 7,314.2 bn.
The Average Weighted Prime Lending Rate (AWPLR) remained unchanged at 11.35% compared to the previous week.
At the weekly T-bill auction, only 90% of the total offered of RS. 155.0Bn was accepted by CBSL, whilst weighted average yield rates were seen scaling higher for the 4th consecutive week. Accordingly, 03M and 06M bills closed at 10.23% (+13bps) and 10.35% (+14bps), respectively while 1Yr bill edged higher to 10.38% (+14bps).
In the forex market, the Rupee appreciated against the USD with the rupee being recorded at Rs. 304.0 compared to Rs. 306.3 recorded during the beginning of the week.
Courtesy: First Capital Research (March 20, 2024)
