Pakistan Money Market Review
Updated on Feb 05,
2001
The short term market maintained a soft tone
throughout the past week. The overnight market slid to as low as 1.00%
towards the weekend. The outflow of Rs. 12.35 billion on Thursday on
account of the OMO did not cause any major jolts in the market which
remained well around 2.00% and 3.00% level. This trend after the OMO
acceptance was unanticipated as one and two week rates jumped up and
trades war conducted as high as 7.00% and 8.50 before falling back to
6.00% and 7.50% % in the respective tenors.
The term market remained active with most of the
activity being conducted in the one month tenor. Trades were reported
between the band of 8.75% and 9.50%. Trades at the lower end were
witnessed early in the week but offers soon moved upwards as the OMO
drew nearer. The result did cause a furor of activity in between 9.00%
and 9.50%. However rates came under pressure once again with trades
being witnessed yet again at 8.755. Two and three month rates maintained
firm with offers being squared off on falling below 11.00%. Nominal to
moderate amounts traded in the two and three month tenor at levels close
to 10.75%. However, these levels did rise but marginally, to touch
11.00% only to be seen falling back after Thursday. The OMO, two way in
nature, saw a total acceptance of Rs. 12.35 billion with Rs. 9.35
billion and Rs. 3.0 billion being picked up in the 2 week and 6 week
tenors with the cut-offs being 9.00% and 9.50%, respectively. The ease
of term levels earlier in the week caused brisk activity in T-Bills.
Four months to maturity T-Bills were traded initially at yields close to
11.50% while later buyers also purchased them at yields of 11.25%. The
announcement of another PIB auction for this month, earlier scheduled
for March, caused prices to come off sharply. The 30/12/00 10 yr. PIB
having traded at premiums close to 110 b.p.s. saw prices falling off
sharply in the wake of the February 14th auction target of Rs. 8.0
billion. Buyers for the 30/12/01 and gray market quotes for the 14/01/01
issue at 100.40 and 100.20 towards the end of the week.
It seems that the Central bank is now in a
comfortable situation, having managed to accept amounts in the OMO and
also being able to keep rates under control. We expect short term rates
to maintain the soft stance keeping in mind that commodity inflows do
generally start in the month of February with a slight upward sentiment
as the auction draws nearer. Term marked levels prevailing in the market
do suggest that the authorities may easily manage to maintain the yields
in the T-Bill auction or may even reject bids keeping in mind that no
major T-Bill maturities are falling next week.
| YIELD PROFILE |
FEDERAL INVESTMENT BONDS |
| . |
THIS
WEEK |
1
WEEK AGO |
1
YEAR AGO |
|
1 Year |
11.80 |
12.15 |
08.75% |
|
2 Year |
12.60 |
12.70 |
09.50% |
|
3 Year |
13.00 |
13.00 |
10.00% |
|
4 Year |
13.00 |
13.00 |
10.25% |
|
S Year |
13.25 |
13.25 |
10.75% |
|
10 Year |
13.50 |
13.50 |
11.25% |
| AUCTIONS |
| BID
DATE |
INSTRUMENT |
RESULT |
SETTLEMENT |
| Jan
24 |
T-BILL |
Jan
24 |
Jan
25 |
| TARGET AMOUNT |
BID AMOUNT |
ACCEPTED AMOUNT |
| Rs.11.407 Bln. |
Rs.9.201 Bln. |
5.353
Bln |
|
|
| MATURITIES |
INSTRUMENT |
DATE |
AMOUNT |
|
T-Bill |
08 Feb |
150 Mln |
|
T-Bill |
22
Feb |
1250 Mln |
|
|
|
REPO RATES |
|
THIS WEEK |
1 WEEK AGO |
1 YEAR AGO |
|
Overnight |
04.50 |
03.50 |
02.50 |
|
1 Week |
05.50 |
06.00 |
05.75 |
|
1 Month |
08.75 |
09.50 |
07.60 |
|
3 Month |
10.75 |
11.25 |
07.75 |
|
6 Month |
11.50 |
11.75 |
08.00 |
|
I Year |
11.80 |
12.00 |
N. A. |
|
|
|
|
| TREASURY
BILL RATES |
| MATURING |
THIS WEEK |
1 WEEK AGO |
1 YEAR AGO |
|
1 Month |
09.75 |
10.50 |
07.50 |
|
2 Month |
11.00 |
10.75 |
07.70 |
|
3 Month |
11.10 |
11.25 |
07.80 |
|
4 Month |
11.20 |
11.40 |
08.00 |
|
5 Month |
11.40 |
11.60 |
08.05 |
|
|
