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FINEX WEEK

  1. The KASB review
  2. Finex week

Updated on Sep 12, 1999

Short Term

The interbank market was volatile throughout the week with overnight trading being conducted at both ends of the spectrum. The T-Bill maturities of Rs. 12.30 bln and Rs. 10.40 bln on the 7th and 8th caused rates to ease off into single digit levels with activity between 2.00% and 5.00%. It was after the auction settlement that rates took a hike and touched 12.90%. The liquidity distribution in the market caused volatility yet again with overnight trades between the wide band of 3.00% and 12.90%. The same trend was witnessed on Saturday with activity at 9.00%, 10.00%, 12.90% and later again at 10.00%. However the market remained long with no respite being sought from the State Bank.

 

Medium Term

The term market was on the rise throughout the week as the State Bank made an unexpected upward revision in the Treasury Bill yields. One month levels had been hovering at around 8.25% and 8.75% before the auction settlement but later desperate borrowing caused rates to shoot up to as high as 11.50%. Heavy amounts were dealt at 10.00% and 10.25%. However rates fell back with deals again at 9.00% and at 8.50% as well. Three month levels rose but only temporarily with offers rising to 10.00% but falling back to pre-auction levels of 8.50% and 8 .75%. Trades were conducted at 9.30%, 9.20% and later around 9.00% as well. Six month rates also climbed up into the band of 10.25% and 10.50% but bids and offers remained mismatched with bids around 9.80%. A total amount of Rs. 19 bln was picked up in the auction after raising the cut-off yields in all the tenors. The 3, 6 and 12 month T-Bill cut-offwere at 8.96% 10.29% and 10.70% respectively.

 

Long Term

With another upward revision in the cut-off levels secondary market deals for the one year paper were hard to come by. Buyers for long dated issues now are interested at levels higher than 10.50% with no sellers in sight for these papers.

 

YIELD PROFILE

                                       This Week I Wk. Ago 1 Yr. Ago

1 Year 10.50 10.25 14.50%
2 Year 12.25 12.50 14.80%
3 Year 13.00 13.00 15.00%
4 Year 13.25 13.25 15.10%
5 Year 13.50 13.50 15.50%
10 Year 14.50 14.00 16.00%

 

AUCTIONS

Bid Dates Instrument Result Settlement
Sep 08 T-BILL Sep 08 Sep 09
Amount Asked Bid Amount 1 Year Ago
Rs.21.8 Bln. Rs.28.00 Bln Rs19.00 Bln.

 

MATURITIES

Instrument Date Amount
T-Bill 05 Sep 12,300 Mln
T-Bill 08 Sep 10,400 Mln
T-Bill 22 Sep 14,310 Mln
T-Bill 30 Sep 5,560 Mln

 

REPO RATES

  This week 1 Wk ago 1 Yr ago
Overnight 09.50 12.95 01.00
1 Week 08.50 12.00 01.25
1 Month 08.60 08.90 05.50
3 Month 09.15 08.70 09.50
6 Month 10.15 09.35 11.85
1 Year 10.50 10.25 N.A.

 

TREASURY BILL RATES

Maturing This Week 1 Wk. Avo 1 Yr. Avo
1 Month 09.25 09.75 07.00
2 Month 09.75 09.10 09.00
3 Month 09.50 09.00 10.50
4 Month 10.00 09.00 11.00
5 Month 10.25 09.25 12.00