Maturities across the board fall after nearly 5 months

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All three Treasury (T) Bill weighted average yields (WAYs) at yesterday’s weekly auction for the first time since the weekly T Bill auction of 8 December 2021 fell; buttressed by Central Bank of Sri Lanka’s (CBSL’s) administered sales.

Consequently the WAYs of the 91,182 and 364 day maturities fell by five, 11 and 17 basis points (bps) each to 23.48, 23.85 and 23.92 per cent respectively at yesterday’s auction.

Meanwhile, CBSL sold 185.17 per cent (Rs 74,069 million) of the 91 day maturity compared to its original offer of Rs 40,000 million at yesterday’s auction. CBSL accepting an abnormally high amount of the 91 day maturity compared to its original offer at yesterday’s auction in a bid to keep a lid on yields has been a phenomenon that has been taking place since the weekly T Bill auction of 10 February 2021 save three.

In related developments, CBSL sold only 31.89 per cent (Rs 9,568 million) and 50.41 per cent (Rs 13,863 million) of the 182 and 364 day maturities, compared to their original offers of Rs 30,000 million and
Rs 27,500 million in order to artificially compress yields. CBSL accepting Spartan amounts of 182 and 364 day maturities to artificially keep yields low is a continuation of a practice begun by it since the weekly T Bill auction of 26 January 2021. Consequently CBSL sold the total amount of Rs 97,500 million worth of
T Bills on offer at yesterday’s auction.

Rs 12.2B Shareholder Wealth Wiped Out

The bourse saw Rs 12.19 billion worth of shareholder being wiped out at yesterday’s trading due to sustained uncertainty. Consequently, the ASPI declined by 0.34 per cent to 2,598.04 points, though the S&P SL 20 Index made a pyrrhic gain of 0.07 per cent of 2,510.99 points on a Rs 1.06 billion turnover and a 46.89 million share volume, yesterday.

However the bourse enjoyed nominal net foreign inflows for the second consecutive market day, with yesterday’s figure being Rs 36.68 million, though in the calendar year to date it has suffered Rs 1.44 billion worth of net foreign outflows.

By Paneetha Ameresekere