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  1. The KASB review
  2. Finex week

Updated on Dec 27, 1999

Heavy lending interest was prevalent throughout the past week with short term rates remaining mostly in low single digits. Overnight activity was conducted within the 10.00% to 11.50% range on Monday and Tuesday but continued lending saw rates coming off sharply. Lowest trades were conducted at 1.50% but rose back up after the acceptance in the OMO. The last day of the week fell on Friday due to the public holiday on 25th December. Overnight activity was seen at 11.00% after lenders preferred to offer in double digits. However, with the market still significantly long, rates fell off and closed at 6.00%. But some last minute squaring did cause a minor spike, the volumes traded were minute.

The term market still remained hostage to the year end scenario with lack of general lending interest in relatively short tenors i.e. the one and two month tenors. Heavy borrowing interest prevailed in two week and one month tenors with bids in the band of 10.00% to 10.50%. Overall lending interest was limited in these tenors, keeping in mind the year-end and the apparent tightness during the first half of January. Three month trades were witnessed with activity mostly from either the 4th or 14th of January. Trades were witnessed in between 8.75% and 9.00%, while trades from preset were conducted around 9.25%. Inflows from T-Bill and OMO maturities were countered by the SBP via an acceptance of Rs. 5 billion through the outright sale of T-Bills at a cut-off of 9.90%. The OMO was two way but the SBP refused to entertain funding requirements of banks in both the two week and one month tenors.

The market continues to remain soft in spite of the year end just around the corner. Banks are holding excess liquidity in preparation for potential contingencies arising from the Y2K bug, and this is likely to keep the market stable over the year end. But the downside of this planning so far has been the prevention of specially the foreign banking sector from locking in funds at relatively healthy levels currently available in term repos. The next auction schedule for next week, should show decent participation in both the 6 month and 1 year papers, particularly from high street local banks. The cut off in the latest OMO for 5 to 6 month outrights was 9.90%, which is already 23 b.p.s, lower than the cutoff announced in the last auction for 6 month instruments. This suggests that the MoF should continue to benefit in next week's auction.




1 Year 11.25 11.00 12.60%
2 Year 12.25 12.25 12.60%
3 Year 13.00 12.75 13.50%
4 Year 13.00 13.00 14.00%
5 Year 13.50 13.50 14.50%
10 Year 14.25 14.00 16.00%


Bid Date Instrument Result Settlement
Dec 15 T-BILL Dec 15 Dec 16
Target Amount Bid
Accepted Amount
Rs. 01.9 Bln

Rs.08.400 Bln

Rs.01.950 Bln


Instrument Data Amount
T-Bill 02 Dec 750 Mln
T-Bill 05 Dec 200 Mln
T-Bill 16 Dec 1,000 Mln
T-Bill 23 Dec 950 Mln




This Week

1 Wk Ago

1 Yr. Ago

Overnight 07.00 12.25 01.00
1 Week 06.50 11.00 03.25
1 Month 09.80 11.35 07.50
3 Month 09.40 09.65 10.35
6 Month 09.70 09.70 11.75
1 Year 11.25 11.00 N. A.


Maturing This Week 1 Wk Ago 1 Yr Ago
1 Month 10.75 12.25 08.75
2 Month 09.75 10.90 09.75
3 Month 09.60 10.35 10.75
4 Month 09.70 10.15 11.25
5 Month 09.75 10.00 11.75