Secondary Bond yields edge up

Tuesday, 5 May 2026 00:06 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities

The Secondary Bond market commenced the week with yields recording a marginal increase, as ongoing Middle Eastern tensions and elevated crude oil prices continued to weigh on sentiment.

Mixed geopolitical developments provided an unclear backdrop. Early trading hours saw some optimism, supported by reports that the US was considering naval escorts for stranded tankers in the Strait of Hormuz to ease oil supply disruptions, along with progress in ongoing diplomatic discussions.

However, this sentiment was later offset by reports of an attack on a US warship, signalling a potential escalation in hostilities. As a result, oil prices picked up intraday towards the latter part of the session.

As a result, investor positioning in the Secondary Bond market stayed defensive, with participants largely adopting a wait-and-see approach amid prevailing uncertainty. However, transaction volumes were seen at healthy levels due the execution of several block trades.

The 15.12.26 maturity traded within the range of 8.55%-8.65%. The 01.03.30 and 01.07.30 maturities traded up the ranges of 10.05%-10.10% and 10.20%-10.25% respectively. The 01.06.33 maturity traded at the rate of 11.05% and the 15.06.35 maturity traded at the rate of 11.26%.

In addition, the net liquidity surplus in the money market was recorded at Rs. 226.55 billion yesterday. As an amount of Rs. 176.10 billion was deposited at Central Bank’s SDFR (Standing Deposit Facility Rate) of 7.25%. In addition, the Domestic Operations Department (DOD) of the Central Bank of Sri Lanka drained out an amount of Rs. 50.45 billion by way of overnight repo auction at a weighted average rate of 7.71% out of an offered amount of Rs 60.00 billion.

The total secondary market Treasury Bond/Bill transacted volume for 30 April was Rs. 17.24 billion.

Forex market

The USD/LKR rate on spot contracts was seen closing the day at Rs. 319.60/320 as against the previous day’s spot next closing level of Rs. 319.75/320.

The total USD/LKR traded volume for 30 April was $ 97.99 million.

(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)