. .



Updated on Nov 03, 2001

The past week was marked with the first auction of government securities after the reduction in the discount rate by 200 basis points. They yields announced on both the Treasury Bills and the Pakistan Investment Bonds did come as a surprise as the market had been expecting lower cut-offs. The liquidity crunch prevailed in the market but not without occasional dips in the overnight, one week and one month levels. The State Bank had to use the Open Market Operation to alleviate the dryness in the system but the injection did not bring about any major change.

The overnight market was towards the higher end for most parts of the week. Trades were seen as low as 8.00% while the market closed at 9.90% at end of each day. Discounting was reported at SBP with the amounts ranging between Rs. 550 million and Rs. 10.50 billion. Term repo trading was brisk prior to the T-bill auction with most of the activity in the one month tenor. Trades were witnessed at around 8.00% but after the injection of Rs. 4.50 billion in the OMO for one week at 7.50% and the T-Bill auction settlement, one month trades were conducted at 7.75%. However as the injection could not bring about any significant change and discounting was reported, one month levels jumped back up to 8.00%. Three month trades were also conducted within the narrow band of 8.00% and 8.20. The cut in the discount rate caused banks to quote lowest bids of 3,6 and 12 month papers at 8.14%, 8.44% and 8.75% respectively in the first auction after this regulatory change. A total bid amount of Rs. 23.35 billion was bid and SBP announced a cut-off 8.19%, 8.51% and 9.10%. The 10 year PIB auction caused a total participation of Rs. 22.267 billion out of which Rs. 19727 was at premium. Banks were willing to buy this paper at a premium of 104.37 that worked out to be a yield to maturity of 12.23% for the paper carrying a coupon rate of 13.00%. It should be noted that the pre-auction trades for this paper had been reported at 104.50 and after SBP sold the paper at 102.50, trades were conducted at 103.50, clearly reflecting the sentiment regarding the reduction in the coupon rate on the government's 10 year paper.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

09.00

09.00

11.75%

2 Year

09.90

09.90

12.50%

3 Year

10.50

10.60

13.00%

4 Year

11.00

11.00

13.25%

5 Year

11.50

11.50

13.50%

10 Year

12.50

12.50

14.25%

.

 
AUCTIONS
BID DATE INSTRUMENT RESULT SETTLEMENT
Oct 31 T-BILL Oct 31 Nov 01
TARGET AMOUNT BID AMOUNT ACCEPTED AMOUNT
Rs 17,650 Mln  Rs. 23,250 Mln Rs.9,900 Mln



 
MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

01 Nov

17,650 Mln

T-Bill

15 Nov

14,850 Mln

T-Bill 29 Nov 18,047 Mln



REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

09.25

09.90

12.95

1 Week

08.13

08.00

12.25

1 Month

07.88

07.75

11.90

3 Month

07.88

09.95

11.30

6 Month

08.20

08.25

11.25

1 Year

08.58

08.60

11.75




TREASURY BILL RATES
MATURING THIS WEEK 1 WEEK AGO 1 YEAR AGO

1 Month

08.60

08.50

12.90

2 Month

08.15

08.00

12.00

3 Month

08.10

08.10

11.70

4 Month

08.20

08.15

11.65

5 Month

08.25

08.20

11.60