Pakistan Money Market Review
Updated on Nov 27,
2000
The short term trading band remained restricted to
12.90% to 13.00%, amidst dull trading. The net shortage in the system
which in spite of an injection of Rs. 6.40 bln in the latest OMO, soared
to Rs. 15.0 bin towards the end of the financial week. A part of the
increase was due to reserve averaging but there have been genuine
outflows on account of agricultural financing, which is putting the
pressure on existing liquidity.
Dubious newspaper reports of an imminent cut in the
CRR combined fueled market rumours instigated a lending spree in both
the 3 and 6 month tenors. Moderate trades were reported in both these
periods in the vicinity of 11.50% and 11.25%, respectively, 6 month
money was also traded in the region of 11.00% from early next month.
Banks having taken a proactive view in locking in their rates in
comparatively long tenors, were further supported by a largely
unexpected injection in the latest OMO. The State Bank opted to release
4 week funds into the market at the surprisingly low cut-off of 10.25%
(this was at least 125 to 150 b.p.s below prevailing secondary market
levels). But this did little in bringing the market off, as the net
shortage was unaffected and in fact gradually swelled.
The State Bank through its OMO has managed to bring term repo levels
off from last week's high, but the fact remains that the short term is
still significantly short and the overnight quote has not budged from
the 12.95% mark. With the advent of the month of Ramazan next week,
Zakat deductions (albeit not immediately) will slowly tighten the system
further. We do not expect any improvement in bill yields in the auction
next week, but the tight short term outlook should keep levels in the 3
month and 6 month period from falling below current quotes.
|
YIELD PROFILE |
FEDERAL INVESTMENT BONDS |
| . |
THIS
WEEK |
1
WEEK AGO |
1
YEAR AGO |
|
1 Year |
12.35 |
12.25 |
11.50% |
|
2 Year |
12.80 |
13.00 |
12.25% |
|
3 Year |
13.50 |
13.50 |
13.00% |
|
4 Year |
13.75 |
13.75 |
13.25% |
|
5 Year |
14.25 |
14.00 |
13.75% |
|
10 Year |
15.00 |
14.75 |
14.50% |
| AUCTIONS |
| BID
DATE |
INSTRUMENT |
RESULT |
SETTLEMENT |
| Nov
15 |
T-BILL |
Nov
15 |
Nov
16 |
| TARGET AMOUNT |
BID
AMOUNT |
ACCEPTED AMOUNT |
| Rs.
4.850 Bln |
Rs. 5.291 Bln. |
Rs.
450 Mln |
|
|
| MATURITIES |
INSTRUMENT |
DATE |
AMOUNT |
|
T-Bill |
02 Nov |
23,390 Mln |
|
T-Bill |
16 Nov |
4,850 Mln |
|
T-Bill |
30 Nov |
1,850 Mln |
|
|
|
REPO RATES |
|
THIS WEEK |
1 WEEK AGO |
1 YEAR AGO |
|
Overnight |
12.95 |
12.95 |
12.50 |
|
1 Week |
12.95 |
12.95 |
12.00 |
|
1 Month |
12.25 |
12.50 |
10.50 |
|
3 Month |
11.35 |
12.05 |
09.90 |
|
6 Month |
11.20 |
11.95 |
10.00 |
|
1 Year |
11.85 |
12.05 |
N.A |
|
|
|
| TREASURY
BILL RATES |
| MATURING |
THIS WEEK |
1 WEEK AGO |
1 YEAR AGO |
|
1 Month |
13.25 |
13.50 |
11.50 |
|
2 Month |
12.30 |
12.60 |
10.75 |
|
3 Month |
11.75 |
12.25 |
10.25 |
|
4 Month |
11.65 |
12.15 |
10.20 |
|
5 Month |
11.60 |
12.00 |
10.10 |
|
|
