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FINEX WEEK

  1. The KASB review
  2. Finex week

Updated on Mar 27, 2000

The interbank market maintained a firm stance throughout the past week with most of the overnight trading taking place in double-digits. An OMO outflow to the tune of Rs. 11 billion kept rates from easing off after the Eid holidays. Discounting was reported at SBP and the figure was estimated to have also crossed into double digits. However the discounting figure fell off to around Rs. 5 billion on the 22nd due to another OMO maturity of Rs. 6.2 billion. Rates on Saturday were volatile with trades between the band of 9.00% and 10.95%, with rates closing yet again at 10.95%. One week trades were witnessed at around 9.75% early in the week with offers later rising to 10.50% but bids unmoved. Rightly so as one week levels fell off to around 9.00% on the weekend.

Term repo levels which reflected sentiments of bullishness during in the pre-Eid scenario fell off on the announcement of the latest auction, scheduled for the 22nd. One, two, three and six month offers fell from highs of 8.25%, 8.00%, 7.65% and 7.85%, respectively. Six month trades were conducted prior to banks placing bids in the auction with moderate amounts changed hands at levels of 7.50%. One and two month levels also followed suit with trades in these two tenors at 7.75% and 7.70%, respectively. The three month tenor during the past week remained inactive. Even with the market closing short a total amount of Rs. 8 billion was bid in the auction against a matched pre-auction target and maturity of Rs. 4.1 billion. SBP refrained from raising the cut-off and a total amount of only Rs. 900 million was picked up with single bids at 7.29%, 7.44% and 7.89% for the three, six month and one year instruments, respectively.

The market has already reflected signs of easing off as witnessed on the last day of the week with trades as low as 9.00%. An OMO maturity of Rs. 4.05 billion on the 28th as well as flows related to Eid withdrawals finding their back in to the system, should keep the market from spiking; although the quarter end has historically been tricky and unpredictable. Whether or not short term rates remain firm remains to be seen but there appears to be slim chances for long term rates to rise significantly and the market sentiment is clearly displaying this. For instance, in spite of the system registering a net shortage during the week, offers of 3 to 6 month money were relatively stable at the previous auction cut-off levels, thereby maintaining status quo.

 

YIELD PROFILE

FEDERAL INVESTMENT BONDS

1 Year

08.75

08.60

11.75%

2 Year

09.25

09.00

12.00%

3 Year

09.75

10.00

13.00%

4 Year

10.00

10.25

13.50%

5 Year

10.50

10.75

14.25%

10 Year

11.25

11.00

14.75%

 


AUCTIONS
Bid Date Instrument Result Settlement
Mar 22 T-BILL Mar 22 Mar 24
Target Amount Bid Amount Accepted Amount
Rs.4.136 Bln

Rs. 12.700 Bln

Rs.900 Mln

 


 

MATURITIES

T-Bill

09 Mar

12,600 Mln

T-Bill

24 Mar

4,100 Mln

T-Bill

25 Mar

125 Mln

 


 

REPO RATES

Overnight

10.90

10.95

15.50

1 Week

09.25

09.75

12.50

1 Month

07.90

08.00

10.75

3 Month

07.45

07.50

10.00

6 Month

07.50

07.45

10.75

1 Year

08.25

08.60

N. A.

 


 

TREASURY BILL RATES

1 Month

08.80

09.25

11.50

2 Month

07.80

07.75

11.65

3 Month

07.70

07.60

11.00

4 Month

07.65

07.55

10.90

5 Month

07.55

07.60

10.75