The Colombo Bourse saw a quiet and subdued trading session, with the market moving sideways. Rising geopolitical tensions and higher global oil prices weighed on today’s investor sentiment.

Nevertheless, the ASPI gained 7 points to close slightly higher at 21,326, while the S&P SL20 dropped 3 points to close at 5,984. Retail investors denoted a modest participation, however primarily contributed to the turnover, while HNW participation stood at a low level.

Weak market breadth was evidenced as the negative contributors outpaced the positive contributors, despite the minor uptick in ASPI. The top positive contributors to the index were CINS, HAYC, DIPD, NDB and AEL.

Turnover for the day stood low at LKR 1.3Bn, which is 64.3% below the monthly average of LKR 3.6Bn. Activity in the Banking sector dominated turnover, contributing 20% of the total, followed by the Materials, and Food, Beverage & Tobacco sectors, which together accounted for 34%. Foreign investors remained net sellers, posting a net outflow of LKR 7.2Mn.

BOND MARKET

Secondary market makes mixed moves amidst moderate volumes

Secondary market activity continued to showcase a mixed tone, with the early hours of the session exhibiting selling pressure, which reversed course towards the latter part of trading as some buying sentiment kicked in.

The overall market sentiment continued to be shaped by the ongoing geopolitical tensions and oil price fluctuations. Trading activity levels were moderate, and amongst the trades executed today, starting at the short end, maturities bearing the dates 01.05.2028, 15.10.2028 and 15.12.2028 traded from 10.05% to 10.10%.

Moving along, the 15.12.2029 maturity traded from 10.37% to 10.30%, whereas the 15.05.2030, 01.08.2030 and 15.10.2030 bonds traded from 10.65% to 10.50%.

At the belly of the curve, the 01.02.2031 and 01.03.2031 maturities traded from 10.83% to 10.65%, followed by the 15.12.2032 maturity, which changed hands from 11.05% to 11.00%.

Within the 2033 segment, the 01.06.2033 and 01.11.2033 bonds traded from 11.55% to 11.35%. The 15.10.2034 maturity transacted from 11.80% to 11.65%, and lastly at the long end, the 15.08.2036 maturity traded from 11.87% to 11.80%.

The PDMO conducted its weekly T-Bill auction today, where a total of LKR 80.0Bn was raised, in line with the initial offer. The 3M bills raised LKR 35.0Bn, while 6M and 12M bills raised LKR 25.0Bn and LKR 20.0Bn respectively, on par with the amounts initially offered. Weighted average yields declined across the board, with the 3M yield declining 10bps to 8.96%, the 6M yield declining 17bps to 9.27% and the 12M yield declining 8bps to 9.81%.

On the external front, the LKR depreciated against the USD, standing at LKR 328.05/USD, compared to LKR 327.90/USD seen earlier. Market liquidity in the banking system marginally contracted to LKR 337.05Bn from LKR 348.76Bn recorded previously.

Popular maturities:

01.02.2031: +21bps

15.12.2032: +10bps

15.01.2033: +35bps

01.06.2033: +10bps

15.10.2034: +15bps

15.08.2036: +10bps

-First Capital Research-