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FINEX WEEK

  1. The KASB review
  2. Finex week

Updated on Feb 28, 2000

An OMO injection on the 21st kept the market from closing short due to the outflow of Rs. 19 billion on the same day. Rates did turn firm and trades were witnessed rising from 6.00% to close around 10.00%. There was no change in rates for the rest of the week and overnight activity was mostly conducted in the narrow double-digit band of 10.00% and 11.00%. The money market experienced shortness on Thursday and Friday and according to market estimates, amounts anywhere close to Rs. 6-7 billion were reported to have been discounted on the 21st, the last day of the reporting week. However rates eased off on Saturday due to the T-Bill maturity of Rs 3.525 billion. The market closed at around 9.75% but not before banks had traded overnight funds at 10.95%.

The injections of Rs. 4.40 billion and Rs. 11 billion in the one month and two week tenor at 6.50% and 6.00% respectively reflected the State Bank's drive to keep rates under pressure. However one-month repo rates in the market rose on account of the liquidity crunch and offers touched a high of 8.00% while bids remained around 7.60%. Trades were reported at 7.50%. Three and six month activity was nominal at around 7.20% in six month and at 7.35%. The auction the past week reflected the continued pressure on T-Bill rates. Against a pre-auction target amount of Rs. 3.50 billion SBP managed to receive a total of Rs. 13.877 billion and picked up only Rs. 2.75 billion. The cut-off for the three-month, six-month and one-year papers were 7.29%, 7.45% and 7.90%, respectively.

The market is expected to remain in high single digit levels but chances of discounting next week seem slim. Offers for one month have already fallen off on Saturday and some lenders even tried to lock in their funds for one and two weeks. Three month bids also fell off in the post auction scenario and bids were also hard to come by from forward dates. This trend is expected to continue as the regular OMO on Thursday draws near.

 

YIELD PROFILE

FEDERAL INVESTMENT BONDS

1 Year 08.75 08.25 13.00%
2 Year 09.25 08.75 14.00%
3 Year 09.75 09.50 14.00%
4 Year 10.00 09.75 14.25%
5 Year 10.50 10.00 14.75%
10 Year 11.00 10.50 15.50%

 


AUCTIONS
Bid Date Instrument Result Settlement
Feb 23 T-BILL Feb 23 Feb 24
Target Amount Bid
Amount
Accepted Amount
Rs. 3.5 Bln.

Rs. 13.877 Bln.

Rs. 2.75 Bln.

 


 

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

 


 

REPO RATES

Overnight 09.75 09.75 00.25
1 Week 09.00 06.80 01.25
1 Month 07.25 06.90 08.25
3 Month 07.35 07.10 11.45
6 Month 07.55 07.35 12.30
1 Year 08.25 08.25 N. A.

 


 

TREASURY BILL RATES
1 Month 08.00 07.00 07.25
2 Month 07.50 07.10 08.25
3 Month 07.40 07.15 10.75
4 Month 07.45 07.25 11.50
5 Month 07.55 07.35 11.90