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FINEX WEEK

  1. The KASB review
  2. Finex week

Updated on July 12 - 18, 1999

Short Term

The interbank market remained glued towards the lower end of the spectrum. Overnight activity was restricted at the 1.00% level but levels rose upwards as the week progressed. The auction settlement caused an outflow of Rs. 2.276 billion which saw rates moving marginally. Trades were witnessed between 1.50% and 4.00% and some trades were also conducted at 4.50%. It was on Saturday the first day of the reporting week that rates shot up due to the outflow expected on Monday on account of the change in the Statutory Reserve Requirements. Overnight trades were witnessed at 12.90% with large amounts in overnight already trading on Friday evening. Market rates have already taken shape for the heavy outflow expected on 12th and with the market already closing short on Saturday the draining of liquidity on Monday is expected to further aggravate the situation.

Medium Term

The term market was active the past week but amounts traded were nominal . It was the one month tenor that moved upwards due to the hike in short term rates. Bids and offers prevailed in the band of 7.75% and 8.25% earlier in the week but as the weekend neared rates shot up with trades at 10.00% and soon amounts also being dealt at 11.00% and some at 11.25% from spot as well as from the 12th of July. Three month activity was also conducted as some borrowers hurriedly covered themselves between the narrow band of 7.75% and 8.25% before offers moved upto 8.50% while the six month tenor was rather quiet. Bids and offers were quoted in forward dates from the 15th and the 21st at 8.50% and 8.75% but later level changed with bids at 8.70% and offers close to 9.00%. Yet again SBP picked up only the target amount and after the seeing the bids pattern it was obvious that SBP may only manage to get the amount against the one year T-Bill without increasing rates drastically. A total amount of Rs. 12.476 billion was bids for the three papers and SBP picked up the amount at a cut-off of 10.497% with the weighted average working out to be 10.33%. The previous cutoff for the one year paper being 10.25%.

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