Government securities yields climbed at both the weekly auction and in secondary trading, while equity activity stayed concentrated in a single sector
Key Highlights
- ASPI closed at 21,133.41, down 128.72 points (-0.61%)
- S&P SL20 closed at 5,947.29, down 29.38 points (-0.49%)
- Daily turnover of LKR 1.63 billion, a third below the monthly average of LKR 2.4 billion
- Foreign investors were net sellers of LKR 8.01 million for the day
- Weekly T-Bill auction yields rose across all three tenors
- LKR depreciated marginally against the US dollar
Stock Market Summary
The Colombo Stock Exchange closed lower, with the ASPI shedding 128.72 points to end at 21,133.41 and the S&P SL20 declining 29.38 points to 5,947.29. Share volume rose to 69.38 million units, up 24.3% from the prior session, even as turnover value fell to LKR 1.63 billion — roughly a third below the market’s monthly average of LKR 2.4 billion.
Trading activity was heavily skewed toward one sector: Food, Beverage & Tobacco counters accounted for 48% of the day’s turnover, with the Capital Goods and Banking sectors together contributing a further 25%.
Foreign participants recorded a net outflow of LKR 8.01 million on the day (inflows of LKR 48.38 million against outflows of LKR 56.39 million). On a month-to-date basis, net foreign flows stand at negative LKR 894.8 million, and year-to-date at negative LKR 56.6 billion. The market traded at a price-to-earnings ratio of 10.9x and a price-to-book ratio of 1.3x.
Fixed Income Summary
The Public Debt Management Office’s weekly T-Bill auction raised the full LKR 70.0 billion on offer. The 3-month yield rose 15 basis points to 9.18%, the 6-month yield rose 12 basis points to 9.36%, and the 12-month yield rose 11 basis points to 9.88%, with all three tenors fully subscribed.
In secondary trading, yields moved higher across most of the curve, with a comparatively sharper increase in bonds maturing between 2030 and 2033. Banking system liquidity contracted to LKR 336.44 billion from LKR 347.55 billion previously. Foreign holdings of government securities rose 1.31% week-on-week to LKR 213.4 billion, continuing a gradual upward trend over recent weeks.
Currency Market Update
The Sri Lankan rupee depreciated slightly against the US dollar, trading at LKR 330.18 compared with LKR 329.04 previously.
Business Impact
Rising T-Bill yields point to a modestly higher near-term cost of government borrowing, a factor businesses and banks that hold or price off short-term government paper will be watching. The below-average equity turnover, concentrated in a narrow set of sectors, suggests limited broad-based capital raising activity in listed shares on the day. The continued rise in foreign holdings of government securities, however, points to sustained external interest in the local debt market even as equity flows remain negative on a year-to-date basis.
What to Watch Next
Markets will watch whether the rise in short-term yields persists in the coming weeks, and whether foreign appetite for government securities continues to offset the extended net-selling trend seen in equities this year.
Key Numbers
| Metric | Value | Change |
|---|---|---|
| ASPI | 21,133.41 | -128.72 (-0.61%) |
| S&P SL20 | 5,947.29 | -29.38 (-0.49%) |
| Turnover | LKR 1.63Bn | -33.1% vs. monthly avg. |
| Foreign Flow (Daily) | -LKR 8.01Mn | — |
| Foreign Flow (YTD) | -LKR 56.6Bn | — |
| 3M T-Bill Yield | 9.18% | +15bps |
| 6M T-Bill Yield | 9.36% | +12bps |
| 12M T-Bill Yield | 9.88% | +11bps |
| USD/LKR | 330.18 | +1.14 |
Source Attribution
Source: Colombo Stock Exchange market data, Central Bank of Sri Lanka statistics and publicly available market information.