Bond Yields Steady Ahead of Rs. 250 Bn Mega Auction 📈

The secondary bond market remained broadly steady with subdued activity as investors adopted a "wait-and-see" approach ahead of today's major Treasury Bond auction. • Fiscal Performance (Jan-Feb 2026): Domestic sentiment was bolstered by a 296% YoY turnaround in the overall budget balance, recording a surplus of Rs. 169.71 Bn (vs. a deficit of Rs. 86.62 Bn in 2025). Revenue and grants rose 35.5% YoY to Rs. 1.03 Tn. • Upcoming T-Bond Auction: A massive Rs. 250 Bn is on offer today (May 12) across four maturities (2030, 2034, 2036, and 2039). This follows a previous undersubscribed auction on April 9 where only Rs. 82.09 Bn was raised. • Secondary Market Rates: • Short-term: 15.12.26 maturity traded at 8.45%. • Medium-term: 2028 maturities ranged between 9.60% - 9.80%. • Long-term: 15.06.34 maturity traded between 11.18% - 11.22%. • Currency & Liquidity: • USD/LKR: Spot contracts closed slightly weaker at Rs. 322.00/322.40 compared to the previous close of Rs. 321.75/321.85. • Liquidity: The money market maintained a net surplus of Rs. 262.96 Bn. Market sentiment remains sensitive to crude oil prices and Middle Eastern geopolitical tensions, offsetting the positive domestic fiscal data.