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FINEX WEEK

  1. The KASB review
  2. Finex week

Updated on Feb 14, 2000

The interbank market remained well within the single digit band throughout the week. The only hike in overnight levels was witnessed on the day of the latest auction settlement. Previously overnight levels had been oscillating between 1.50% and 5.00% but touched 9.00% on Thursday, the 10th of February. Volatility was witnessed on Saturday with overnight activity taking place initially at 4.00%, rising to 7.00% but falling back to 3.00% at the end of the day. Term levels were on the decline throughout the week with the auction results providing further impetus to the declining term levels. It was only the one month market that remained choppy due to the pre-auction target of Rs. 14.40 billion being announced by the State Bank. Offers had fallen to around 6.75% early in the week but later rose back to 7.25% with amounts trading at both ends. It was heavy lending pressure in the three and six month tenor at 7.25% and 7.65% that saw bids falling back. Nominal amounts were traded in three months at 7.00% while moderate amounts changed hands in the five and six month period between 7.45% and 7.65%, towards the tail end of the week. The latest auction managed to attract a total amount of Rs. 36.65 billion. The State Bank continued its policy of bringing rates down with the cut-off for the three, six months and the one year papers at 7.74%, 7.99% and 8.44%, respectively. A total amount of Rs. 8.95 billion was drained from the market via the latest acceptance. A T-Bill maturity of Rs. 5.30 billion is due on the 15th of Feb. and this should keep the overnight market under severe pressure. We do not expect any surprises in the term repo market as pressure to build assets and lock in rates at currently available levels should keep the market well in favor of banks running short. Borrowing interest especially in call should become noticeable as the current depressed term repo market should provide ample opportunity for bidders to hedge themselves at comfortable levels.

 

YIELD PROFILE

FEDERAL INVESTMENT BONDS

1 Year 08.50 08.75 13.65%
2 Year 09.00 09.50 13.75%
3 Year 09.50 10.00 14.25%
4 Year 10.00 10.25 14.50%
5 Year 10.25 10.75 15.25%
10 Year 11.75 11.25 16.25%

 


 

AUCTIONS
Bid Date Instrument Result Settlement
Feb 09 T-BILL Feb 09 Feb 10
Target Amount Bid
Amount
Accepted Amount
Rs. 14.4 Bln

Rs36.650

Rs. 8.950 Bln

 


 

MATURITIES
T-Bill 02 Feb 8,885 Mln
T-Bill 10 Feb 100 Mln
T-Bill 15 Feb 5,300 Mln
T-Bill 24 Feb 25 Mln
T-Bill 26 Feb 3,525 Mln

 


 

REPO RATES

Overnight 03.50 03.50 02.75
1 Week 05.00 06.75 05.25
1 Month 06.70 07.50 11.35
3 Month 07.00 07.70 12.40
6 Month 07.50 07.90 12.80
1 Year 08.50 08.75 N. A.

 


 

TREASURY BILL RATES
1 Month 06.50 07.20 12.75
2 Month 07.00 07.50 13.15
3 Month 07.10 07.70 13.25
4 Month 07.20 07.80 13.40
5 Month 07.40 07.90 13.65