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FINEX WEEK

  1. The KASB review
  2. Finex week

Updated on 27th June, 1999

Short Term

Short term rates remained soft prior to the latest auction settlement on the 24th of June. The initial overnight trading band was within the 0.50% to 0.75%, but with the hefty acceptance of Rs. 12.75 bln in the recent auction. levels soon started to show signs of bouyancy. Banks running long welcomed this change as the overnight band went into the high single digit to low double digit band. Although the close on Friday (25th June) was at an easy 3.00% (on account of some last minute panic placement), this did not fool most lenders and major amounts were dealt in the region of 9.00% to 10.00%, this weekend. The close however was higher m the vicinity of 11.50%.

Medium Term

The sudden improvement in term repo levels during this week, meant lost opportunities for most traders having read the market wrongly. The main factor having affected the term repo market was the settlement on the latest auction. The 1 month quote which had fallen into the 4.00% to 4.50% band was given an enthusiastic boost and climbed into the 7.00% to 7.50% range before reaching as high as 9 50% during the tailend of the week. This also had a strong bearing on the 3 month market. Offers of 3 month funds were available close to 6.35% prior to the auctions, were available at 8.00% towards the week's close. So far this means that existing sentiments are bullish. It appears that as the fiscal year end approaches, demand for funds (specifically in the short term) will rise.

Long Term

Buying interest in long dated instruments has slacked due to the sudden upsurge in the short term market.

MAY

15.23

15.51

JUN

15.31

15.31

JUL

13.22

14.35

AUG

8.38

11.93

SEP

6.86

10.74

OCT

11.55

12.26

NOV

6.75

9.05

DEC

8.05

10.64

JAN

11.95

11.76

FEB

10.46

12.14

MAR

7.58

9.04

APR

10.30

9.80

MAY

8.96

9.39