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FINEX WEEK

  1. The KASB review
  2. Finex week

Updated on Nov 29, 1999

Interbank rates were well within double digits during the past week. An OMO outflow of Rs. 1.68 bln on Monday caused rates to rise sharply with trades as high as 12.00%. Another outflow on account of a fresh OMO saw rates touching 12.95%. Volatility was witnessed on Saturday with trades in between 12.00% and 12.50% but offers later came off to 11.50% with overnight activity as low as 10.00% towards close. Traders largely attributed this fall in the overnight market on cash reserve averaging. Bidders having managed to pick up seven day funds within the band of 9.50% and 11.00% fairly early during this week were in for a treat. The market on Thursday was overwhelmed by the news of the Finance Minister speaking on a possible reduction in mark up rates as the weekly OMO was scheduled for the same day. This allowed the SBP to drain a total amount of Rs. 5.5 bln. via the outright sale of T-Bills at a maximum cut-off of 10.15%. However contrary to this news, term rates in the interbank market were on a steep rise with three month trades being reported as high as 11.00% while earlier activity had been witnessed at 10.50%. Amounts for call money also traded for two and three months in the band of 12.00% and 12.50%. The past week also saw moderate interest in one year papers. Early in the week bids and offers for the 18th November paper were available at 10.65% and 10.45%, respectively but soon moved to as high as 11.00% and 10.70%, respectively, after the OMO result, with trades hard to come by. The surge in term levels has clearly indicated the desperation of banks in covering their positions over the year end. Outflows on account of the Prize Bond Scheme have also been responsible for keeping the market at the higher end of the spectrum at the start and now at the end of the month, with bidding interest gradually picking up in term call money. With very few maturities during the next week and the auction just around the comer we expect short term rates to maintain a firm tone.

 

YIELD PROFILE

 

FEDERAL INVESTMENT BONDS

1 Year

12.00

11.25

12.75%

2 Year

12.75

12.00

12.70%

3 Year

13.75

12.75

13.50%

4 Year

14.00

13.00

13.50%

5 Year

14.50

13.50

14.50%

10 Year

15.00

14.25

16.00%

 


 

AUCTIONS
Bid Date Instrument Result Settlement
Nov 17 T-BILL Nov 17 Nov 18
Amount
Asked
Bid
Amount
1 Year
Ago
Rs. 05.9 Bln. Rs. 19.350 Bln Rs. 06.35 Bln

 


 

MATURITIES
Instrument Data Amount

T-Bill

05 Nov

26,420 Mln

T-Bill

10 Nov

3,550 Mln

T-Bill

17 Nov

5,000 Mln

T-Bill

26 Nov

800 Mln

 


 

REPO RATES

 

This Week

1 Wk Ago

1 Yr. Ago

Overnight

11.00

05.50

16.00

1 Week

11.75

05.00

12.00

1 Month

10.75

06.75

09.25

3 Month

10.80

08.90

11.00

6 Month

10.10

09.50

11.75

1 Year

12.00

11.25

N. A.

 


 

TREASURY BILL RATES
Maturing This Week 1 Wk Ago 1 Yr Ago

1 Month

11.75

07.75

10.00

2 Month

11.00

09.00

10.75

3 Month

10.80

09.10

11.50

4 Month

10.50

09.30

11.75

5 Month

10.30

09.55

11.90