📉 Secondary Bond Market Continues Bearish Trend Amid Yield Pressures

The Sri Lankan secondary bond market remained subdued yesterday as bearish sentiment pushed yields higher, driven by recent Treasury bill auction results. Market Summary • Yield Pressures: Investor caution persisted as the rise in Treasury bill yields following the recent 100 bps policy rate hike has significantly outpaced the monetary adjustment. Global energy market volatility and mixed geopolitical signals added further upward pressure. • Bond Trades: Activity was limited but supported by block trades. Key maturities traded as follows: • 15.02.28 & 15.03.28: 11.95% • 01.05.28 & 01.07.28: 11.90% - 12.00% • 01.08.30: 12.30% • 15.06.34: 13.15% • 2035 maturities (March/June): 13.25% - 13.30% • 15.08.36: 13.28% - 13.29% • Money Market Liquidity: The net liquidity surplus stood at Rs. 111.94 Bn. The Central Bank drained Rs. 25 Bn via overnight Repo and Rs. 10 Bn via short-term Repo auctions, both at a weighted average rate of 8.75%. The weighted average call money rate held above 9.00% for a sixth day at 9.16%, while the Repo rate was 9.20%. • Forex Performance: The USD/LKR spot contracts closed weaker at Rs. 336.75/337.50 compared to the previous close of Rs. 335.00/337.00. Total traded volume reached US$ 98 Mn (as of June 3).