Bond yields trade on narrow band

Foreign holding in Rupee Treasuries records net inflow Money market liquidity increases Rupee depreciates

- BY WEALTH TRUST SECURITIES

THE Secondary bond market started off last week with yields holding broadly steady as market participants were seen adopting a wait-and-see approach ahead of the upcoming Treasury bond auction due last Friday and the anticipated final decision on the United States 'Reciprocal Tariffs'.

Market activity throughout the week was subdued and stayed range-bound, leading to a period of consolidation and characterised by sideways movement. On last Thursday (a Poya Holiday), it was announced that US President has issued a letter to Sri Lanka President, setting a 30% tariff, down from an original proposed 44%. Subsequently as the market opened on Friday, coinciding with the Rs. 200.00 b T-bond auction, the news drew positive reactions. However, this was met with selling pressure as some market participants looked to book profit ahead of T-bonds auction.

The three Treasury bond auctions saw only an amount of Rs. 142.24 billion (71.12%) accepted in total against an offered total of Rs. 200 billion, despite total bids received exceeding the offered amount by 1.58 times.