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FINEX WEEK

  1. The KASB review
  2. Finex week

Updated on Feb 21, 2000

The interbank market witnessed overnights trading at both ends of the spectrum. A T-Bill maturity of Rs. 5.30 billion on the 15th kept rates soft within the 1.00%--2.00% range but trades were finally witnessed at 10.90% on Friday and within 9.00% and 10.50% on Saturday. In fact the market closed short on Friday with nominal amounts being discounted. Agricultural payments and the acceptance in the latest OMO on Thursday were reported to be the factors which caused short-term levels to rise sharply towards the end of the week. One-week trades had initially been conducted at 5.00% and were also reported at 7.00% towards the later half of the week.

The term market was active with concentration in the one-month and the six-month tenors. Expecting no change, heavy trades in the 1 month tenor from forward dates i.e. from the 21st had been witnessed in between 6.50% and 7.50% while some activity was also reported at 6.50% during the last week. Lenders expecting an OMO on the 21st, on account of the outflow of Rs. 19 billion from the market, had been continuously lending. It was only later that rates rose which caused one-month levels to cross 7.00%. Three month bids and offers were available at 6.80% and 7.25% with rates remaining mismatched. Moderate trading was witnessed in repos maturing end of July with levels in between 7.25% and 7.40% from the 21st. Six month bids and offers were also available at 7.25% and 7.50% but trades were scarce. The SBP this week intervened to mop up funds to the tune of Rs. 3.40 billion by way of outright sale and the three-month repo with the cut-offs at 7.48% and 7.74%, respectively.

The special intervention announced by the SBP for Monday would mean that an inflow of approximately Rs. 20 billion could manage to keep equilibrium in the market. Bids are expected to be concentrated in the one-month tenor keeping in mind the inflows on the 24th and also the outflows in the early week of March. With chances of a net injection appearing to be fairly decent, the 3 to 6 month repo market is likely to maintain status quo with an upward swing clearly not in the offing.

 

YIELD PROFILE

FEDERAL INVESTMENT BONDS

1 Year 08.25 08.50 13.65%
2 Year 08.75 09.00 14.25%
3 Year 09.50 09.50 14.25%
4 Year 09.75 10.00 1450%
5 Year 10.00 10.25 15.25%
10 Year 10.50 11.75 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 09.75 03.50 00.50
1 Week 06.80 05.00 04.25
1 Month 06.90 06.70 09.50
3 Month 07.10 07.00 11.90
6 Month 07.35 07.50 12.70
1 Year 08.25 08.50 N. A.

 


 

TREASURY BILL RATES
1 Month 07.00 06.50 09.00
2 Month 07.10 07.00 10.50
3 Month 07.15 07.10 11.75
4 Month 07.25 07.20 12.75
5 Month 07.35 07.40 12.90