The secondary market yield curve remained broadly stable during the past week as subdued trading activity persisted around the Treasury Bond auction. Meanwhile, weighted average yields at the weekly Treasury Bill auction recorded declines across all tenors, First Capital Research stated in its latest weekly report.

According to the report, secondary market activity opened on a cautious note with selling interest emerging ahead of the T-Bond auction, causing a slight upward adjustment in yields amid moderate trading volumes. As the week progressed, investor participation remained muted, with market participants largely staying on the sidelines in anticipation of the auction, keeping the yield curve broadly unchanged.

Following the successful completion of the bond auction, the market witnessed mixed sentiment, with selling pressure concentrated at the short end and buying interest emerging in longer-dated maturities. However, activity remained subdued, and the yield curve largely held its ground through the weekend.

At the Treasury Bond auction held on July 13, 2026, the Public Debt Management Office (PDMO) successfully raised the full offered amount of LKR 150.0 billion. This comprised LKR 70.0 billion through the 2030 maturity, LKR 50.0 billion through the 2034 maturity, and LKR 30.0 billion through the 2037 maturity, at weighted average yields of 11.57%, 12.04%, and 12.58%, respectively.

Similarly, at the weekly Treasury Bill auction held on July 15, 2026, the PDMO raised the full offered amount of LKR 120.0 billion. The 3-month, 6-month, and 12-month bills raised LKR 55.0 billion, LKR 35.0 billion, and LKR 30.0 billion, respectively. Weighted average yields declined across all tenors, with the 3-month bill easing by 8 basis points (bps) to 10.13%, the 6-month bill by 3 bps to 10.27%, and the 12-month bill by 1 bp to 10.20%.

On the external front, the Sri Lankan Rupee (LKR) depreciated against the US Dollar, closing the week at LKR 336.3/USD compared to LKR 334.7/USD seen previously. Market liquidity within the banking system expanded significantly, starting the week at LKR 125.89 billion and closing higher at LKR 157.19 billion.

Thus the market data may highlight a clear divergence between short-term liquidity comfort and long-term caution, which points toward a gradual steepening of the yield curve in the near term.

The emergence of buying interest in longer-dated maturities (2034 and 2037) shows that institutional investors are eager to lock in double-digit yields while liquidity is high. This institutional support will likely place a temporary ceiling on long-term rates.

The mild depreciation of the rupee (moving to LKR 336.3/USD) acts as a cautionary counter-signal. If the currency continues to face pressure, it could limit how far short-term yields can fall, flattening the curve back out.

The Colombo Stock Exchange (CSE) witnessed a quiet trading session on Friday, with the benchmark All Share Price Index (ASPI) edging marginally lower down by 42.16 points or 0.20% to close at 21,405.41.

Market turnover remained thin, coming in at Rs. 0.72 billion (approximately US$ 2.2 million), reflecting a general lack of investor participation as most sectors encountered downward pressure.

A total of 31.94 million shares changed hands across 13,397 trades, resulting in a negative market breadth where declining counters outpaced gainers 127 to 91. Blue-chip counters Sampath Bank PLC (SAMP), Lanka IOC PLC (LIOC), and John Keells Holdings PLC (JKH) anchored the day’s market turnover, while a notable off-market crossing was recorded in Chevron Lubricants Lanka PLC (LLUB). Trading volume in SAMP alone was highly concentrated, accounting for 12% of the day’s total turnover.

Sector performance remained mixed, with the Banking sector emerging as the most actively traded, posting a modest gain of 0.18%. The Health Care Equipment & Services sector secured the spot as the day’s best performer, rising by 0.55%.

Conversely, the Household & Personal Products sector faced the steepest decline, dropping 1.95% to finish as the worst-performing sector of the day. In terms of individual movements, Blue Diamonds Jewellery Worldwide PLC [Voting] (PINS.N) led the gainers, advancing by 6.11%, while Agstar PLC (AGPL.N) emerged as the top loser, shedding 9.09%.

By Hiran H. Senewiratne

Ceylinco Life has commenced construction of its 36th company-owned branch building with the laying of the foundation stone for a new eco-friendly edifice in Kirindiwela, reaffirming the life insurance market leader’s continued investment in sustainable infrastructure and enhanced customer service.

The ceremony was attended by Ceylinco Life Chairman Mr R. Renganathan, Managing Director/CEO Mr Thushara Ranasinghe, members of the Board of Directors and senior management of Ceylinco Life, alongside valued customers and distinguished invitees from the Kirindiwela area.

Driven by its commitment to delivering superior service in a welcoming and customer-centric environment, Ceylinco Life has consistently invested in purpose-built branch buildings that serve as flagship locations. The Kirindiwela branch will join a network of 35 such company-owned buildings currently in operation across the country, each designed to offer elevated standards of service and modern facilities.

The new building will be constructed on company-owned land and developed in line with the Company’s green building concept, incorporating environmentally responsible design principles and energy-efficient technologies.

Spanning a floor area of 3,440 square feet, the Kirindiwela branch will utilise locally developed prefabricated construction technology from the National Engineering Research and Development Centre (NERD). The building is planned to operate on a 100 per cent self-sufficient solar electricity system, eliminating reliance on the national grid.

Key sustainability features of the proposed building include natural ventilation design, a topography-friendly layout, a green patch with grass grown in between interlocking blocks, energy-efficient air conditioning and lighting systems, and a rainwater harvesting facility. A dedicated Sewerage Treatment Plant (STP) will recycle wastewater for toilet flushing and gardening, while the company will practice the green concept of ‘Reuse’ in air-conditioning and electronic equipment, further minimising environmental impact.