ASPI Adds 42 Points on Institutional Demand While Bond Yields Diverge Across the Curve
Key Highlights
Sri Lanka’s equity market extended its recent gains on Tuesday, with local institutional and high-net-worth buying offsetting continued foreign selling. In fixed income, short-term Treasury bill yields eased further while longer-dated secondary market yields moved higher. The rupee held steady against the US dollar.
Stock Market Summary
The All Share Price Index closed at 21,229.14, up 42 points, while the S&P SL20 index advanced to 5,961.40. High-net-worth and institutional investors drove the day’s buying, with retail participation at typical levels. Daily turnover reached LKR 2,018.12 million, running 14.5% above the monthly average of LKR 1.8 billion, while volume climbed to 87.47 million shares, up 34.3% on the previous session. A single counter, RIL, accounted for 51% of turnover and 49% of volume, with the Retailing sector leading overall trading activity. Foreign investors were net sellers, posting an outflow of LKR 1,023.6 million for the day, extending a year-to-date net outflow that now stands at LKR 37,234.7 million.
Fixed Income Summary
The Public Debt Management Office raised the full LKR 140.0 billion offered at this week’s Treasury bill auction. Weighted average yields on the 3-month and 6-month bills eased by 9 and 3 basis points respectively, to 9.86% and 10.21%, while the 12-month yield held at 10.20%. In the secondary market, short-tenor yields fell in line with the auction, but longer tenors moved higher, with the 4-year and 10-year points each up 20 basis points week-on-week. Secondary market trading was described as subdued, with moderate participation from banks and primary dealers. Foreign holdings of government securities rose 3.30% week-on-week to LKR 182,386 million. Overnight banking system liquidity contracted to LKR 165.96 billion from LKR 173.80 billion previously.
Currency Market Update
The rupee held flat against the US dollar at 336.25, unchanged from the prior session.
Business Impact
The day’s data points to a market where local capital continues to underwrite equity gains even as foreign investors remain cautious, a pattern relevant to companies weighing capital raises or new listings. In fixed income, the widening gap between easing short-term rates and rising long-term yields is a signal worth watching for businesses assessing both short-term financing costs and longer-term borrowing plans. A steady rupee provides near-term stability for importers and exporters managing currency exposure.
What to Watch Next
Markets will watch the outcome of the Treasury bond auction scheduled for 30 July, covering four maturities out to 2037. Separately, MBSL.R was the day’s sharpest mover among individual stocks, falling 50%, though no corporate disclosure explaining the move was available in market data reviewed for this report — worth monitoring for any forthcoming announcement.
Source Attribution
Source: Colombo Stock Exchange market data, Central Bank of Sri Lanka statistics and publicly available market information.