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FINEX WEEK

  1. The KASB review
  2. Finex week

Updated on Jan 17, 2000

The post Eid scenario in the interbank market was mixed with inflows and outflows from the market. Rates initially remained in single digits of 6.00% and 7.00% early in the week but the outflow of Rs.13 bln on the 13th caused rates to sky rocket and touch 10.90%. Even with this outflow no special intervention was witnessed from the State Bank. The market closed short with the discounting being reported to as high as Rs. 14 bln according to unconfirmed reports.

The term market was active with concentration in the three-month tenor during the past week. One-month rates rose sharply with bids as high as 9.50% from 8.25% earlier in the week. Three-month levels rose sharply with trades at 7.75% on Tuesday but borrowing from certain quarters causing it to hover within the vicinity of 9.00% on Saturday. Large volumes were dealt between 8.00% and 8.75% in this tenor. Interest was also evident in the term call market with three and six month bids touching 9.50% and 10.25%, respectively. Decent trades were witnessed particularly in the 5 to 6 month tenor. The latest T-Bill auction settlement on the 13th of the month was the first of the new millennium and also the first after the cut in the discount rate. A total amount of Rs. 18.525 bln was bid in the auction against the target amount of Rs. 3.60 billion. However the State Bank restricted to picking up only Rs. 100 mln in the six-month paper while rejecting all bids. This acceptance saw the cut-off level for the six month T-Bill being brought down to 8.49% from 10.13% in December.

No respite is expected in the interbank market with the market closing short on the weekend. Further outflows are expected next week on account of the F.E. 25 swaps that the State Bank had conducted last month. There is also an outflow of Rs. 2.675 bln on the 20th of the month as the injection in the two week tenor matures. Fund managers will be keeping a close eye on the behaviour of the State Bank in the next OMO. This is exactly the catalyst that will decide the near term as well as the medium term direction of rates, and trading volumes are expected to rise as banks take their cue.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

  THIS WEEK 1 WK AGO 1 YR AGO

1 Year

09.75

09.75

13.05%

2 Year

10.50

10.50

13.30%

3 Year

11.00

11.25

13.75%

4 Year

11.50

11.50

14.50%

5 Year

11.75

11.75

15.00%

10 Year

12.50

12.50

16.50%


AUCTIONS
Bid Date Instrument Result Settlement
Jan 12 T-BILL Jan 12 Jan 13
Target Amount Bid
Amount
Accepted Amount
Rs.03.0 Bln.

Rs.18.525 Bln

Rs.100.00 Mln

MATURITIES

Instrument

Date

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 10.95 06.50 16.45
1 Week 10.65 07.50 16.30
1 Month 09.45 08.00 12.40
3 Month 08.70 07.50 11.65
6 Month 08.85 08.20 12.15
1 Year 09.75 09.75 N. A.

TREASURY BILL RATES
Maturing This Week 1 Wk Ago 1 Yr Ago
1 Month 09.60 08.75 13.50
2 Month 09.00 08.10 12.50
3 Month 08.75 07.75 12.40
4 Month 08.60 07.90 12.30
5 Month 08.75 08.20 12.35