The secondary market yield curve remained broadly stable with limited trades and thin volumes, reflecting subdued sentiment. This was mainly due to lingering uncertainty ahead of the IMF board meeting scheduled on June 12, 2024, regarding the disbursement of the IMF’s 3rd tranche, and the anticipated bond auction on June 13, 2024. As a result, investors adopted a wait-and-see approach.
Among the traded maturities, the tail end of the curve saw a 17bps dip in yields, while short tenors moved up to 25bps during the week.
At the Rs. 235.0Bn Treasury bill auction, the CBSL fully accepted the total offered amount. The 3M and 6M bills were oversubscribed amidst higher reception, whereas the 1Yr bill was undersubscribed. Auction yields for the 3M and 1Yr T-Bills increased after two months, reversing the persistent downtick in yields. Consequently, the 3M weighted average yield rate closed at 8.70% (+8bps WoW) and the 1Yr bill closed at 9.27% (+9bps WoW), while the 6M bill remained unchanged at 9.04%.
In the forex market, LKR slightly depreciated against the greenback recording at LKR 302.2 compared to LKR 301.5 recorded at the beginning of the week.
Courtesy: First Capital Research (June 5, 2024)
