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FINEX WEEK

  1. The KASB review
  2. Finex week

Updated on Jan 03, 2000

The money market remained well above the double digit mark contrary to the year end scenario in 1998. Overnight rates had closed at 3.00% to 4.00% on Dec 31st last year, but this time the market remained at 13.00% throughout the day on Dec 30th with some overnight repos also being reported at slightly higher levels as well Infact banks also covered themselves over the year end for one week at 13.00%. However amounts traded for one week were moderate. The market closed short with reports of a heavy discounting figure of an estimated Rs. 8.0 bln to Rs. 10.0 bln. SBP injection of Rs. 4.40 billion through its Special OMO and a previous OMO maturity of Rs. 3.50 billion also failed to keep banks from approaching SBP for respite. The term market did see significant activity with concentration in forward deals from the month of January. One month trades were hard to come by with lenders refraining to cross the year end and also due to the month of January registering a net outflow in excess of Rs. 10 billion. Bids did touch a high of 11.50% in repo but trades were hard to come by due to lack of offers. Three month trades were traded from forward dates of 15th Jan. and 20th Jan in between 8.90% and 9.20% while six month trades were also reported around 9.50%, from similar dates. SBP refrained from heightening the cut-off in the latest auction settlement on the 30th of December by keeping the one year T-Bill cut-off level relatively stable at 10.3061% and accepted a meager amount of Rs. 222.505 million.

The much awaited news pertaining to an imminent cut in interest rates was finally driven home with a reduction in rates available in National Savings Schemes applicable before the turn of the century. It now seems that clear signals are present for another downward reduction in T-Bill cut-offs. Even a short market on year end did not refrain some banks from participating in the outright sale of T-Bills in the OMO on the 30th of Dec. and heavy participation in the auctions in January still cannot be ruled out. However, with the money market still short, coupled with January already registering a net shortfall, chances of short term rates coming off do not seem likely.

 

YIELD PROFILE

FEDERAL INVESTMENT BONDS

  THIS WEEK 1 WK AGO 1 YR AGO

Overnight

13.00

07.00

03.50

1 Week

13.00

06.50

05.25

1 Month

11.35

09.80

07.75

3 Month

09.70

09.40

10.30

6 Month

09.90

09.70

11.25

1 Year

11.25

11.25

NA.


AUCTIONS
Bid Date Instrument Result Settlement
Dec 29 T-BILL Dec 30 Dec 30
Target Amount Bid
Amount
Accepted Amount
Rs. 01.0 Bln

Rs.05.422 Bln

Rs. 222.05 Mln

MATURITIES
Instrument Data Amount
T-Bill 11 Jan 3,550 Mln
T-Bill 21 Jan 3,050 Mln
T-Bill 27 Jan 450 Mln

 

REPO RATES

 

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.

 

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

1 Month

12.35

10.75

10.00

2 Month

10.80

09.75

09.00

3 Month

09.75

09.60

09.75

4 Month

09.80

09.70

10.50

5 Month

09.95

09.75

10.90