The Colombo Bourse closed on a positive note today, with the ASPI gaining 4 points to close at 21,150, while the S&P SL20 declined by 12 points to close at 5,933.

Investor sentiment remained positive following the Central Bank of Sri Lanka's decision to maintain policy interest rates, supporting buying interest despite the mixed performance of the benchmark indices.

Both HNW and retail investor participation remained high during the session, contributing to overall market activity. The main positive contributors to the ASPI were SEYB, LION, PKME, CARG, and SEMB.X. Daily turnover stood at LKR 3.5Bn, marking an increase of 113.2% over the monthly average of LKR 1.7Bn.

Real Estate Management & Development sector led the daily turnover with a share of 65%, amid higher number of crossings seen in ONAL, followed by the Banking, and Diversified Financials sectors collectively contributing 15%. Foreign investors turned net sellers, posting a net outflow of LKR 240.7Mn.

BOND MARKET

CBSL holds OPR unchanged at 8.75%

Today, the Central Bank of Sri Lanka (CBSL) announced its decision to keep the Overnight Policy Rate (OPR) unchanged at 8.75%. While CBSL highlighted the adverse implications arising from renewed geopolitical tensions, it noted that the monetary tightening implemented in May-26, together with the subsequent anchoring of inflation expectations, would continue to transmit through the economy in the period ahead.

The secondary market remained subdued today, with the yield curve broadly unchanged. Investor participation and trading volumes remained lacklustre, with trading interest largely confined to the short end of the yield curve.

Consequently, the 15.10.2028 maturity was seen trading at 10.74%. In the 2029 segment, 15.06.2029 traded at 11.10% while 15.09.2029 and 15.10.2029 both traded higher at 11.25%.

Moreover, the PDMO concluded its weekly T-Bill auction, successfully raising the full initial offer of LKR 140.0Bn. The 3M and 6M bills raised LKR 61.5Bn and LKR 60.1Bn respectively, both higher than the initial offer.

The 12M bill raised LKR 18.4Bn, lower than the initial offer of LKR 30.0Bn. The weighted average yields of the 3M and 6M bills adjusted down by 18bps and 3bps respectively to stand at 9.95% and 10.24% while that of the 12M bill remained unchanged at 10.20%. 

On the external front, the LKR slightly depreciated against the USD, standing at LKR 336.35/USD, compared to LKR 336.27/USD seen earlier. Overnight liquidity in the banking system expanded to LKR 175.20Bn from LKR 162.36Bn recorded previously.

Courtesy - First Capital Research