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FINEX WEEK

  1. The KASB review
  2. Finex week

Updated on Jan 31, 2000

Overnight activity was restricted within middle order single digits this week. It was only due to the outflow of Rs. 2.85 bln in the latest auction settlement on Thursday (Jan 27th) that overnights spiked in to the 6.00% to 7.00% region before coming off once again to 5.00% on the same day's close. The close this weekend was even lower at 4.50%. Excess liquidity coupled with it's even distribution kept short term rates in check.

Interest in term was moderate this week. The 1 month quote remained relatively stable between 7.00% to 7.50%, with overall volumes being thin. Offers of 3 month funds were readily available at 8.00% but trades were noted at slightly lower levels of 7.75% to 7.85%.

Volumes in longer tenors such as 6 months were also slim with the trading range being 7.90% to 8.20%. Fund managers were appreciative of the SBP having announced cut-offs in all the three tenors in the latest auction settlement; and hence providing trading benchmarks for secondary market activity in these respective periods. The cut-offs were 8.01%, 8.49% and 8.99% for the three month, 6 month and one year tenor, respectively.

In spite of the SBP's acceptance in the latest auction; the secondary market largely ignored the levels set by the central bank and continued to trade with a bearish bias. Offers of 3 month and 6 month money were quoted at 7.90% and 8.20% in the post auction settlement scenario; while bids for the one year instrument were noted at 8.50%. This trend should continue well in to next week. There are also signs of the short term market coming off further next week due to a decent bill maturity of Rs. 9.0 bln on the 2nd of Feb. Traders were seen preparing for this drop by attempting to lock in their funds in the one week tenor at 6.00%.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

1 Year 09.50 09.50 13.35%
2 Year 10.25 10.25 13.35%
3 Year 11.00 11.00 14.25%
4 Year 11.50 11.50 14.50%
5 Year 11.75 11.75 15.25%
10 Year 12.00 12.25 16.50%

 


 

AUCTIONS
Bid Date Instrument Result Settlement
Jan 26 T-BILL Jan 36 Jan 37
Target Amount Bid
Amount
Accepted Amount
Rs. 03.4 Bln.

Rs.17.700 Bln

Rs. 2.850 Bln

 


 

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

Overnight 04.50 05.00 16.45
l Week 05.50 06.50 10.25
1 Month 07.50 06.90 10.90
3 Month 07.80 07.75 12.00
6 Month 08.00 08.20 12.70
I Year 09.50 09.50 N. A.

 


 

TREASURY BILL RATES
1 Month 07.10 09.60 12.25
2 Month 07.40 09.00 12.50
3 Month 07.65 08.75 12.75
4 Month 07.75 08.60 12.85
5 Month 07.95 08.75 12.90