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FINEX WEEK

  1. The KASB review
  2. Finex week

Updated on Oct 25, 1999

Short Term

The interbank market eased during the past week. Dealers got an idea of the liquidity position of the marked when banks were able to square themselves on Saturday without any discounting. Rates eased off on Wednesday to 12.00% in anticipation of the 2-way OMO. Rates fell drastically on Thursday to close at 4.50% when the State Bank injected a total of Rs. 6.80 billion in the one week (at a cut-off of 10.50%) and one month market (at a cut-off of 10.75%). However, the market rebounded again as most of the OMO injection will be depleted from the market within a week. The market closed on Saturday at 10.50%.

Medium Term

Term rates have fallen drastically during the past week. Dealers were eager to place their funds as they realized that all government borrowing will be frozen due to the change in the political setup. One month rates fell in the early parts of the week from 9.80% on Monday to 9.25% on Wednesday. The descent of the rates went into free fall on Thursday after the State Bank injected liquidity into the market via a two way OMO. The one month market closed on Saturday with bids and offers at 7.50% and 8.00% respectively. Heavy lending interest was evident in the two month market, especially as the maturity fell just before year-end. Rates for that tenor fell in unison with the one month market from 9.30% to 8.10% as lenders are looking at a support level of 8.00%. Three month rates also exhibited the same trendline as rates fell from 10.30% to below 9.00%. Six months was relatively quiet even though rates broke and fell below the psychological support of 10.00% and closed at 9.50%. Trades were witnessed between a band of 9.50% and 9.75%

Long Term

Borrowing interest was evident in the 1 to 1.5 year to maturity FIB at 11.25%. Interest was also evident in the 3 years to maturity FIB at 12.75%. However, no trades were witnessed.

 

YIELD PROFILE

 

FEDERAL INVESTMENT BONDS

  THIS WEEK 1 WK AGO 1 YR AGO
1 Year 10.75 11.40 13.90%
2 Year 11.75 12.30 14.90%
3 Year 12.50 13.50 14.50%
4 Year 12.75 13.75 14.75%
5 Year 13.50 14.00 15.00%
10 Year 14.25 14.50 16.50%

                             


   

AUCTIONS
Bid Date Instrument Result Settlement
Oct 20 T-BILL Oct 20 Oct 21
Amount
Asked
Bid
Amount
1 Year
Ago
Rs.2.2 Bln. Rs.10.30 Bln REJECTED

 


 

MATURITIES
Instrument Data Amount
T-Bill 13 Oct 2,200 Mln
T-Bill 19 Oct 175 Mln
T-Bill 20 Oct 1,210 Mln

 


 

REPO RATES

 

This Week

1 Wk Ago

1 Yr. Ago

Overnight 10.50 12.95 16.45
1 Week 07.50 12.50 03.50
1 Month 07.75 09.90 07.50
3 Month 09.00 10.30 09.25
6 Month 09.50 10.80 11.25
1 Year 10.75 11.40 N. A.

 


 

TREASURY BILL RATES
Maturing This Week 1 Wk Ago 1 Yr Ago
1 Month 08.60 11.25 08.50
2 Month 08.80 10.20 09.50
3 Month 09.10 10.60 10.00
4 Month 09.20 10.70 10.25
5 Month 09.70 10.75 11.50