!logo.jpg (6328 bytes) . .

1_popup_home.gif (1391 bytes) market.gif (6606 bytes)


  1. The KASB review
  2. Finex week

Updated on Jan 24, 2000

The net shortage in the system kept the market acutely tilted early during the week. The discounting figure which was initially reported at Rs. 12.0 bln, had by some estimates risen to Rs. 18.0 bln in the wake of the F.E. 25 swap maturities that were due this week. The massive injection of Rs. 23.0 bln (Rs. 4.785 bln at 7.00% in two weeks and Rs. 1 9.20 bln at 6.75% in one month) via the latest two-way OMO on the 20th of this month, was largely anticipated although it's magnitude was under query. The market reacted strongly to this injection less on Thursday and more towards the weekend. Overnights closed in the region of 4.00% this week.

Activity prior to the OMO remained thin. In spite of apprehensions of an injection by the State Bank, aggressive lending interest was curtailed by banks and there was a preference for a wait and see approach. This proved to be a missed opportunity for banks having failed to lock in their funds, as the three month quote which was initially hovering within the range of 8.25% to 8.60% collapsed into the band of 7.75% to 7.90% and decent volumes were dealt. Longer period such as six months were also caught in a bearish spell as offers fell from a high of 8.75% to a low of 8.30% towards the weekend. Needless to add that with the one month quote proved to be the most susceptible and dived by over 100 b.p.s from the midweek high of 8.25% to 7.00% towards the week's close.

Next week should start off on a relatively easy note with the overnight trading band being within middle order single digits. Interest in the 1 month tenor is also likely to rise as the date for next scheduled auction nears, with a gradual swelling in bidding interest. Fund managers however forecast the term repo market mainly ranging from three months to six months to maintain status quo with a slight bearish undertone; which is likely to lead to decent participation in the next auction. Avid interest should also prevail in the medium to long term call market; as banks on the look out for funding, take the advantage of the current bearish trend and cover their unhedged positions.




1 Year 09.50 09.75 13.75%
2 Year 10.25 10.50 13.75%
3 Year 11.00 11.00 14.50%
4 Year 11.50 11.50 14.75%
5 Year 11.75 11.75 15.25%
10 Year 12.25 12.50 16.50%



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

Rs.18.525 Bln

Rs.100.00 Mln







T-Bill 11 Jan 3,550 Mln
T-Bill 21 Jan 3,050 Mln
T-Bill 27 Jan 450 Mln





This Week

1 Wk Ago

1 Yr. Ago

Overnight 05.00 10.95 16.50
1 Week 06.50 10.65 16.45
I Month 06.90 09.45 14.10
3 Month 07.75 08.70 12.90
6 Month 08.20 08.85 13.10
1 Year 09.50 09.75 N. A.



Maturing This Week 1 Wk Ago 1 Yr Ago
1 Month 07.25 09.60 14.75
2 Month 07.50 09.00 13.75
3 Month 07.60 08.75 13.50
4 Month 07.75 08.60 13.35
5 Month 08.00 08.75 13.25