The Colombo Bourse gained momentum today, supported by buying interest following the decline in T-Bill yields at yesterday’s weekly auction, alongside increased participation from both retail and HNW investors compared to the previous session.

Investor interest was evident in export-oriented and materials sector companies. The top positive contributors to the index were CINS, HAYC, RCL, DIPD, and AEL.

Accordingly, the ASPI closed the day at 21,395, gaining 69 points, while the S&P SL20 Index ended at 5,995, up 12 points. Amidst multiple crossings, turnover rose to LKR 2.4Bn, higher than yesterday’s level, although it remained 28.7% below the monthly average turnover of LKR 3.4Bn.

The Food, Beverage & Tobacco sector led the daily turnover with a share of 26%, followed by the Materials and Diversified Financials sectors collectively contributing 41%. Foreign investors turned net buyers, posting a net inflow of LKR 68.4Mn.

BOND MARKET

Selling dominates market sentiment, driving yields higher

Investors shifted from yesterday’s mixed stance and appeared more decisive today, with selling interest becoming more evident despite intermittent bouts of buying.

The yield curve edged higher, led by mid-tenor yields, which rose by around 25bps, while short and long tenors saw a more modest uptick of around 10bps.

Trading volumes remained moderate across today’s session.  Within the 2030 segment, the 01.08.2030 and 15.10.2030 maturities traded between 10.60% and 10.75%, initially driven by selling pressure, before settling at 10.70% as buying interest emerged.

Moving ahead, 15.01.2033 traded between 11.15%-11.20% and at the belly end of the yield curve, 15.10.2034 and 15.03.2035 both changed hands at 11.70%. Further along the yield curve, 15.08.2036 traded at 11.85% while 01.07.2037 was seen trading higher at 11.95%.

On the external front, the LKR depreciated against the USD, standing at LKR 328.59/USD, compared to LKR 328.05/USD seen earlier. Market liquidity in the banking system marginally contracted to LKR 330.09Bn from LKR 337.05Bn recorded previously.

Popular maturities:

01.08.2030: +15bps

15.10.2030: +12bps

-First Capital Research