The Colombo Bourse concluded today’s session on a negative note, with both indices closing significantly lower amid investor concerns over the continued depreciation of the LKR against the USD, prevailing macroeconomic uncertainties within the Sri Lankan economy, and escalating geopolitical tensions.

The ASPI closed at 21,789, falling below the 22,000-mark following a decline of 509 points, while the S&P SL20 settled at 6,034 after losing 115 points. MELS, SAMP, JKH, CINS, and HNB emerged as the largest negative contributors to the ASPI.

Participation from HNW investors remained at relatively subdued levels, whereas retail investor activity was notably strong. Daily turnover stood at LKR 3.8Bn, marking an increase of 5.0% over the monthly average of LKR 3.6Bn.

Capital Goods sector led the daily turnover with a share of 36%, followed by the Banking, and Diversified Financials sectors collectively contributing 24%. Foreign investors remained net buyers, posting a net inflow of LKR 39.0Mn.

BOND MARKET

Persistent selling pushes curve higher

The market remained under selling pressure today, resulting in higher yields across the curve, while trading activity stayed subdued throughout the session.

At the short end, the 01.07.2028 and 15.10.2028 maturities traded in the range of 10.10%-10.15%. Further along the curve, the 01.07.2030 maturity traded between 10.40% and 10.45%, while the 15.03.2031 maturity changed hands at 10.60%.

In the long end, the 15.06.2034 maturity traded at 11.45%, and the 15.08.2036 maturity traded at 11.50%. The PDMO raised LKR 67.2Bn at today’s T-Bill auction, below the initially offered amount of LKR 140.0Bn, despite total bids reaching LKR 232.3Bn.

PDMO accepted bids lower than the offered for all three maturities with 3M, 6M and 12M bills at LKR 46.1Bn, LKR 16.4Bn and LKR 4.7Bn. Weighted average yields stood at 8.18% for the 3M bill (up by 5bps), 8.25% for the 6M bill (up by 2bps), and unchanged at 8.49% for the 12M bill.

On the external front, the LKR depreciated against the USD, standing at LKR 328.20/USD, compared to LKR 326.92/USD seen previously. Overnight liquidity in the banking system contracted to LKR 168.33Bn from LKR 181.68Bn recorded previously.

-First Capital Research-