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FINEX WEEK

  1. The KASB review
  2. Finex week

Updated on Sep 27, 1999

Short Term

Inter bank money market rates remained in lower single digit levels throughout the week. However, trading was witnessed in double digits as well due to a Special State Bank intervention on Friday which caused an outflow from the system. Overnight was traded between the wide band of 5.00% and 10.00% but closing levels were witnessed at 1.00% and 2.00%. Inflows to the tune of Rs. 14 billion on the 22nd and the acceptance of only Rs. 5.7 billion in the auction on the 23rd brought rates down drastically on Thursday. Closing levels were in the band of 1.00%. The Special OMO on Friday even saw overnight levels as high as 9.00% but the acceptance of Rs. 11.95 billion could not keep levels towards the higher end and yet again closed back at 1.00%. Volatility persisted on Saturday as well with activity between 3.00% and 8.00% with levels falling in the morning rising during the day and finally closing back towards. However the announcement for another Special OMO for Monday has reflected upon the State Banks intention and rates are expected to rise sharply.

Medium Term

The auction and the Special OMO during the past week kept rates unstable. Earlier in the week one month activity was witnessed at levels of 9.25% while two month bidders were willing at 9.50% but offers were hard to come by. Announcement of the auction target of Rs. 20.43 billion saw levels rising with activity in four, five and six months as high as 10.40% in all three tenors. Rates did fall back after only Rs. 5.70 billion was accepted in the auction. The break up was as follows: 3 month Rs. 1.0 bln at 8.96%, 6 month Rs 5.10 bln at 10.28% and 1 year Rs 608 mln at 10.73%. The result caused panic lending with one, two and three month trades as low as 8.90%, 8.00% and 8.30%. This was however short lived and the OMO on Friday brought levels in the respective tenors to 9.50%, 9.00% and 9.00% with nominal to moderate amounts trading around these levels. A total amount of Rs. 11.98 billion was mopped from the system. State Bank desperation was evident from the fact that amounts offered in all tenors were accepted while a portion of the bid amount for outright papers were accepted. 1 week Rs. 1.0 bln at 9.50%. 1 month Rs. 1.40 bln at 10.24%, 3 month Rs. 2.35 bln at 9.75%, 5 month Rs. 2.0 bln at 10.25% and outright sale of Rs. 5.20 bln at 10.25%. It was at the end of trading hours on Saturday that SBP decided to intervene yet again on the coming Monday by way of an OMO. Rates from forward rose sharply with one month bids and offers at 9.75% and 10.00% but trades were scarce. Two and three month offers rose to 10.00% and 9.80% but bids were in the band of 9.35% and 9.50% for both the tenors.

Long Term

With a revision in the cut-off levels in the OMO long term interest in one year papers has risen to levels close to 11.00% but sellers are hard to find at anywhere close to these levels.

                                      

REPO RATES

  This Week 1 Wk Ago 1 Yr. Ago
Overnight 02.25 07.00 01.00
1 Week 08.00 07.25 01.75
1 Month 09.15 08.90 06.90
3 Month 09.25 09.10 11.00
6 Month 10.25 10.35 12.95
1 Year 10.50 10.50 N. A.

 


 

TREASURY BILL RATES

Maturing This Week 1 Wk Ago 1 Yr Ago
1 Month 09.75 09.50 08.50
2 Month 09.65 09.75 10.75
3 Month 09.50 09.50 12.00
4 Month 09.90 09.75 12.50
5 Month 10.10 10.25 13.00

   


 

FEDERAL INVESTMENT BONDS

  This Week 1 Wk Ago 1 Yr Ago
1 Year 10.50 10.50 14.90%
2 Year 12.25 12.25 14.85%
3 Year 13.00 13.00 15.50%
4 Year 13.25 13.25 15.60%
5 Year 13.50 13.50 15.75%
10 Year 14.00 14.25 16.25%

 


 

AUCTIONS
Bid Date Instrument Result Settlement
Sep 22 T-BILL Sep 22 Sep 23
Amount Asked Bid Amount 1 Year Ago
Rs.21.43 Bln. Rs.21.403 Bln Rs5.708 Bln.

 


 

MATURITIES
Instrument Data 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