The week opened with a lacklustre sentiment, amidst less participation as investors chose to be on the sidelines awaiting clarity on the DDO. Hence, the secondary market yields remained broadly stable whilst weighted average yields at the weekly T-Bill auction, normalised to near pre-crisis level where 1 yr maturity plunged below 18.00% after 13 months.
The secondary market displayed a dull performance during the week as investor interest was seen to be toned down while activities were limited and volumes remained thin. As the week progressed, slight mixed sentiment was witnessed on 2025 and 2027 maturities which traded consecutively during the week.
Meanwhile, following the clarification on the DDO where Govt. assured no haircut on domestic debt, buying interest emerged on 2Y and 4Yr mid tenors which traded in the range of 27.00%-26.50%, and 23.00%-22.75%.
At the weekly Treasury Bill auction total offered amount of Rs. 110.0 bn was fully accepted by the CBSL whilst the weighted average yield rates edged down after a week as, 3M, 6M and 1Y bills fell to 23.00% (-16bps), 19.49% (-112bps) and 16.99% (-109bps).
In the Forex market, LKR slightly appreciated against the greenback with rupee being recorded at LKR 306.1 compared to LKR 308.5 recorded during the beginning of the week.
Courtesy: First Capital Research (June 21, 2023)