The broader market extended its gains from yesterday as Banking sector counters and holding companies exerted a positive pressure on the index, whilst majority of the sectors witnessed price gains across the board following the CBSLs policy rates cut by 25bps.
As a result, the ASPI halted the day in green at 11,702 gaining over 100 points for the second consecutive day, rebounding from the price declines observed during the past few weeks.
HNB, COMB, JKH, NDB and LOLC emerged as the major positive contributors to the index. Despite subdued participation of the HNWIs and retail investors, turnover improved slightly from yesterday and stood at LKR 591.1Mn.
However, this marked a 52.0% decrease from the monthly average standing at LKR 1.2Bn. The Banking sector led the turnover with 25%, followed by the Capital Goods and Diversified Financials sectors jointly contributing 39% to the overall turnover.
Furthermore, foreign investors remained net sellers, with a net foreign outflow of LKR 28.8Mn.
Monetary policy board of the CBSL announces a 25bps rate cut
The Monetary Policy Board of the Central Bank of Sri Lanka, at its meeting held on 23rd Jul-24, decided to reduce the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) by 25bps to 8.25% and 9.25%, respectively.
However, the secondary bond market did not reflect the outcome of the policy rate cut and displayed an overall mixed sentiment during today’s trading session.
On the short end of the curve, 15.05.2026 and 01.06.2026 closed transactions at 10.20% amidst some buying interest. Similarly, 15.12.2026 closed at 10.40% whilst 01.05.2027 traded within the range of 11.50%-11.40%.
However, on the mid end, trading sentiment was mixed with 15.12.2027 hovering between 11.65% -11.60%. Also on the 2028 maturity, 15.02.2028, 15.03.2028, 01.05.2028 and 01.07.2028 registered activities between 11.70% -11.75%.
Meanwhile, CBSL conducted the weekly T-Bill auction today, and fully accepted the total offered amount of LKR 160.0Bn. The 03M and 06M bills were oversubscribed amidst higher reception and registered an over 40bps decline in weighted average yield rates.
Accordingly, 03M closed at 9.14% (-41bps) and 06M closed at 9.34% (-44bps). However, 1yr bill only saw a relatively smaller decrease of 12bps, closing at a weighted average yield rate of 9.95%. On the external side, LKR depreciated against the greenback for the 2nd continuous day closing at LKR 303.9.
Courtesy: First Capital Research
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