The week’s culmination was marked by the bond auction, witnessing an upswing in yields particularly across the 2026, 2027, 2028, and 2032 maturities where yields increased to 15.75% (+260bps), 15.00% (+200bps), 14.75% (+185bps), and 13.63% (+100bps) respectively, shaping the market’s trajectory by the week’s close.
As the week drew to a close, the secondary market exhibited restrained activity, as participants took the sidelines awaiting a clearer market direction amidst the surge in bills, coupled with the CBSL directive urging LCBs to curtail lending rates.
At the Rs. 200.0Bn bond auction, the weighted average yields witnessed an upsurge across the maturities, as 01.08.26 tenor traded between 15.75%-15.95% before settling at 15.80%. Furthermore, 01.07.28 tenor hovered between 14.50%-15.00% before getting accepted at 15.03% respectively, whilst the total offered amount of Rs. 200.0 bn got fully accepted in the second phase of the auction.
At the weekly treasury bill auction, only 72% of the total offered amount of Rs. 150.0 bn was accepted by CBSL. 03M bill enticed the most bids with 47% being accepted from the total accepted amount of Rs. 108.1bn.
Accordingly, weighted average yield of 3M tenor surged by 51bps to 18.48% while 6M and 1Yr registered at 15.36% and 13.58% recording an uptick of 33bps and 27bps.
In the Forex market, the rupee slightly appreciated against the greenback with rupee being recorded at Rs. 323.9 compared to Rs. 324.0 recorded during the beginning of the week.
Courtesy: First Capital Research (August 31, 2023)