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FINEX WEEK

  1. The KASB review
  2. Finex week

Updated on 26th July, 1999

Short Term

Short term rates remained sky high with overnight activity restricted at 12.90% and 12.95%. Banks had to regularly visit the repo discount window for respite. According to unconfirmed reports a maximum of Rs. 5 billion was reported on Thursday. Outflows on account of OMO maturities and T Bill auction settlement were the major reasons. Earlier in the week banks were lucky to cover themselves for one and two weeks at levels between 10.25% and 11.50% but later rates climbed sharply. The pressure on short term rates evidenced on Saturday has clearly shown that rates are to fall off further and overnight rates are to ease of as well in the days to come.

Medium Term

Term interest was mixed due to the sharp movement of rates and also the bidding pattern witnessed in the auction. Pre-auction one month bids and offers ware hovering in the band of 8.75% and 9.25%. Three month levels were quoted at 7.75% and 8.00% but trades were scarce. It was the post auction result session that saw hectic trading took shape. Borrowers were quickly squared off by the lenders keeping in mind the heavy inflows expected next month. One month bids at 5.00% were squared while two, three and five month trades were seen at 7.75%, 7.25% and 7.80%, respectively. It was on the last day of the week that saw rates crashing with one, two and three month falling off and settling at 6.25%, 6.00% and 6.50% respectively with large volumes being traded in all these tenors. Bids were squared off right, left and center by hurried lenders and rates also falling further with some borrowers hurriedly lending out funds borrowed on the trading system. The State Bank picked up slightly more that the target amount in the auction, the past week. Six month bids were rejected yet again while bids for three and one year papers were accepted at a cut-off of 6.99% and 10.35%, respectively. The total amount accepted was Rs. 6.96 billion. The State Bank clearly showing the future trend to expect on T-Bill rates.

Long Term

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

Overnight

12.80

12.90

01.00

1 Week

11.75

11.50

04.50

1 Month

06.35

08.90

12.75

3 Month

06.60

07.90

14.65

6 Month

07.15

08.85

15.10

I Year

09.10

10.50

N. A.

 

1 Month

07.00

09.50

14.75

2 Month

06.75

08.75

14.85

3 Month

06.90

08.50

14.90

4 Month

07.10

08.50

15.10

5 Month

07.25

08.75

15.25

 

1 Year

09.10

10.50

16.00%

2 Year

09.10

10.50

16.00%

3 Year

13.00

13.50

16.50%

4 Year

13.00

13.50

16.50%

5 Year

13.90

14.00

16.75%

10 Near

14.25

14.50

17.50%

Bid Date Instrument Result Settlement

Jut 21 T-BILL Jul 21 Jul 22

 

Target Amount Bid Amount AcceDted Amount

Rs. 5.80 Bln. Rs.35.219 Bln Rs.6.960Bln.

 

In trument Date Allloullt

T-Bill

10Jul

2.298 Bln

T-Bill

15 Jul

100 Bln

T-Bill

20Jul

5.809 Bln

FIB 03 10 Jul 300 Bln