Monday Nov 02, 2026
Monday Nov 02, 2026
Monday, 2 November 2026 05:01 - - {{hitsCtrl.values.hits}}
By Wealth Trust Securities
The secondary Bond market for the week ending 30 October witnessed an uptick in yields, with the elevated levels attracting strong absorptive buying interest that provided market support.
Following a broadly steady start, selective selling pushed yields higher, particularly on the 2033 and 2034 tenors, prompting renewed buying interest and facilitating several block transactions. By midweek, yields stabilised, trading steady to marginally lower on selected tenors amid healthy activity with a notable intraweek recovery observed. Following Thursday’s Treasury Bond auction, yields adjusted to the auction outcome, with the elevated levels yet again drawing strong demand and triggering a notable pickup in post-auction activity and transaction volumes. The week concluded with the market consolidating amid modest volumes, with underlying buying interest providing support against the upward pressure on yields.
Nevertheless, secondary market two-way quotes closed marginally higher along much of the yield curve. The 15.01.28 and 15.02.28 traded at yields of 10.55% and 10.45% respectively, while the 15.09.29 traded within 11.10% to 11.15%.
The 2030 tenors saw yields move higher during the week. The 01.08.30 traded up from an intraweek low of 11.50% to a high of 11.60% while the 15.10.30 exhibited a similar pattern, rising from an intraweek low of 11.54% to a high of 11.63%.
The 2031 tenors saw the 01.02.31 trade within 11.70% to 11.75%, the 15.03.31 within 11.74% to 11.80% and the 01.12.31 within 11.85% to 11.90%.
The 15.12.32 saw a more pronounced upward move in yields, trading up from an intraweek low of 12.00% to a high of 12.20% before recovering to 12.15%. The 01.06.33 traded at 12.30%, while the 01.11.33 traded within 12.35% to 12.37%.
The 2034 tenors also saw yields move higher during the week. The 15.06.34 traded up from an intraweek low of 12.50% to a high of 12.55%, the 15.09.34 at 12.55% while the auctioned 15.10.34 saw a sharper post-auction adjustment, rising from an intraweek low of 12.55% to a high of 12.63%.
On the longer end, the auctioned 15.08.36 traded within 12.90% to 12.85%, post-auction.
At the weekly Treasury Bill auction conducted last Wednesday (28), weighted average yields were seen holding steady with the rate on the 182-day and 364-day tenors remaining unchanged at 9.44% and 9.95% respectively for the fourth straight week. However, the 91-day tenor maturity saw its yield edge up marginally by 02 basis points to 9.34%.
The Public Debt Management Office (PDMO) raised only Rs. 86.48 billion or 86.48% in total out of the Rs. 100 billion offered in total. The 91-day tenor recorded acceptance above its respective target allocation, while the 182-day and 364-day recorded acceptances below their respective offered amounts.
Total bids received amounted to 2.25 times the overall offer.
This was followed by a round of Treasury Bond auctions conducted last Thursday (29 October),
which successfully raised the entire Rs. 100 billion offered at the 1st phase in competitive bidding. The auctions recorded a mixed outcome with weighted averages coming in line or above pre-auction market two-ways.
The bids received to accepted amount ratio stood at 2.19 times.
Maturity-wise the results were as follows: The shorter tenor 15.05.30 maturity was issued at a weighted average yield of 11.44%, in line with its pre-auction secondary market two-way quote; the 15.10.34 maturity was issued at a weighted average yield of 12.61%, marginally above its pre-auction secondary market two-way quote; the 15.08.36 maturity was issued at a weighted average of 12.85%.
Further to the Treasury Bond auction held on 29 October 2026, Rs. 8 billion was raised being the maximum amount offered, via the Direct Issuance Window as well.
Meanwhile, the foreign holdings of rupee-denominated government securities recorded a net outflow for the second straight week, registering a decrease amounting 4.30% or Rs. 8.61 billion for the week ended 29th October. Accordingly, the total foreign holdings of rupee treasuries decreased to Rs. 190.94 billion.
The Surplus liquidity in money markets was seen remaining elevated for the week ending 30th October 2026, close to the Rs. 400 billion mark and at Rs 392.68 billion increasing compared to its previous week’s closing level of Rs. 384.90 billion.
The weighted average rates on Call Money and Repo were at 9.04% and 9.10% respectively at the end of the week.
Furthermore, the Rupee or the USD/LKR rate was seen depreciating, to close the week ending 3oth October at Rs 332.55/332.65 as against its previous week’s closing of Rs. 332.10/332.20. This was subsequent to trading within an intraweek high of Rs. 332.23 and a low of Rs. 332.70 intraweek.
The average daily USD/LKR traded volume over the first four trading days of the week stood at $ 54.34 million.
(References: Public Debt Management Office - Ministry of Finance, Central Bank of Sri Lanka, Bloomberg E-Bond Trading Platform, Money Broking Companies)
