The week began with a relatively stable yield curve, though investor sentiment appeared on a mixed note. Moreover, selling interest persisted in the market, even in the wake of the recent IMF staff-level approval during the first review of the 48-month EFF-supported program.
The primary focus of investors gravitated towards shorter to mid-term tenors, with 2Yr and 3Yr maturities trading within the range of 14.95%-14.80% and 15.02%-14.85%, respectively throughout the week. Meanwhile, WAYR dipped across the board at the weekly T-Bill auction with a steep decline witnessed on 3M T-Bill.
However, during the latter part of the week, the secondary bond market activities continued to remain dull with ultra-thin volumes as the market participants preferred to adopt a wait and see approach amidst the hovering economic woes.
CBSL continued to undersubscribe T-Bills for the 4th consecutive week at the weekly T-Bill auction, with only 86.3% of the total offered amount of Rs. 135.0Bn being accepted of which 63.6% being accepted from 03M T-Bill. Weighted average yields of 03M and 06M T-Bills further trimmed down to 16.10% (-20bps) and 14.93% (-1bps), respectively while 1Yr T-Bill remained flat at 13.02%.
In the Forex market, the Rupee. depreciated against the USD with rupee being recorded at Rs. 327.1 compared to Rs. 324.4 recorded during the beginning of the week.
Courtesy: First Capital Research (October 25, 2023)
