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FINEX WEEK

  1. The KASB review
  2. Finex week

Updated on 5th July, 1999

Short Term

Bidders were in for a pleasant surprise this week, as short term rates came off eased off considerably towards the month end. Injection of liquidity via foreign exchange swaps by the State Bank on the 29th of June, placed tremendous pressure on rates and 3 day trades were reported within a high of 8.50% to a low of 6.00%. The close again on the 30th was an easy 4.00%, which is surprising considering that overnight levels had reached as high as 15.00% on the same day. Towards the tail end of the week, which also included the start of the new month, levels failed to show any signs of an upward turn. But this scenario now definitely appears to be shortlived, as the State Bank has announced an upward revision in the Cash Reserve Requirement (CRR) from 3.50% to 5.00%, effective from the 12th of July. This would effectively mean an outflow of approximately Rs 15.0 bln from the system.

Medium Term

Trepidation pertaining to levels on the year end, coupled with news of significant tax outflows forming the banking system, led to a jump in 1 month levels. The 1 month quote jumped to a high of 9.50%, but with the short term market coming off strongly towards the month end, the 1 month plummeted to a low of 5.50%. However, this weekend, with news of the State Bank having increased the Cash Reserve Requirement (CRR) from the present 3.50% to 5.00%, effective the 12th of July; trades were reported at 7.25% in the 1 month tenor. There are definite sentiments of a rise in I month levels during next week. The present liquid period should not extend over the 9th of July as the 10th of July would mark the start of a new week and hence high interest rates. Interest rates in the 3 month tenor which were previously prevailing at 7.25% had also fallen to 6.50%, but the recent announcement also showed signs of rising into the 7.50% range.

Long Term

Long dated instruments failed to gain any major interest, eitherway.

YIELD PROFILE

Federal Investment Bond

This Week 1 Wk. Ago 1 Yr. Ago

1 Year 09.50 09.75 17.00%
2 Year 09.50 09.75 17.25%
3 Year 12.75 12.75 17.50%
4 Year 12.75 12.75 17.50%
5 Year 13.25 13.25 17.75%
10 Year 14.00 t4.00 18.00%

Auctions

Bid Date Instrument Result Settlement

Jun 23 T-BILL Jun 24 Jun 24

Target Amount Bid Amount Accented Amount

Rs. 2.59 Bln. Rs.30.645 Bln Rs.12.580 Bln.

 

Instrument Date Amount

T-Bill 10 Jul 2.298 bln.
T-Bill 15 Jul 100 mln.
T-Bill 20 Jul 5.809 bln
FIB 03 10 Jul 300 mln.

Repo Rates

This Week 1 WK Avo 1 Yr. An

Overnight   00.50   11.50   02.00
1 Week   03.50   11.50   09.50
1 Month   05.75   09.25   12.65
3 Month   07.00   07.75   14.15
6 Month   07.70   08.00   14.35
1 Year   09.50   08.00   N. A.

Treasury Bill Rates

                       This Week 1 Wk Avo 1 Yr. Avo

1 Month   06.50   09.75   13.25
2 Month   06.75   08.75   14.00
3 Month   07.25   08.35   14.10
4 Month   07.50   08.35   14.50
5 Month   07.75   08.25   14.50