. .



Updated on Jan 12, 2002

Interbank short term rates were mostly at the higher end of the spectrum for most parts of the week. T-Bill rates continue to ease off in the primary market as was witnessed in the auction the past week. This added fuel to the fire that was raging in the term market due to the rumours regarding a cut in the discount rate. There was no change reported from the State Bank but term activity was witnessed at lows not witnessed since August 2000.

Overnight trading was witnessed amid tight conditions with banks approaching SBP for respite. Trades throughout the week were conducted at levels of 8.00% and 9.00% but the market continued to close short. It was on Saturday that rates fell off with the day closing with overnight rates at 3.00%. However the overnight trading band on the weekend was 2.00% and 7.00%. The one and two week levels also fell off sharply with trades in the respective tenors at levels of 6.00% and 6.50%, respectively. Trading in the 27/12/01 one year T-Bill maturing before the year end at 8.00% prior to the auction set the tone for the participation. A total bid of Rs. 25.65 billion was witnessed with the State Bank accepting only Rs. 8.60 billion and stayed below the target amount of Rs. 9.396 billion. Bids for the three month paper were rejected while the six and twelve month papers cut-off were 7.79% and 8.24%, respectively. Desperate buying was evident after the announcement of the auction result and the one year paper was traded at the 8.00% level. Simultaneously rates slid off sharply in the term market and six month call trades were reported at close to 7.50%. The SBP also announced a target amount of Rs. 8 billion for the three and five year PIBs to be auctioned on the 28th of January. The three and five year PIBs bearing a coupon of 10.50% and 11.00% continue to prove popular with the market and forward trades for both the papers were reported at premium prices of 101 within minutes of the announcement of the auction. The five year PIB price rose further to 101.75 yielding 10.54% clearly echoing the sentiment prevailing in the market.

The trend of yield that prevailed the past week has certainly taken into account the chances of a 100 basis points cut in the State Bank repo discount rate. Even with the presidential address to the nation in the evening we feel that the interbank money market is not to be affected in any major way, whatever the outcome of the speech may be.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

08.25

08.35

12.25%

2 Year

09.00

09.15

12.75%

3 Year

10.50

10.50

13.35%

4 Year

10.75

10.75

13.50%

5 Year

11.00

11.00

14.00%

10 Year

12.00

12.25

14.75%

.

 
AUCTIONS
BID DATE INSTRUMENT RESULT SETTLEMENT
Jan 09 T-BILL Jan 09 Jan 10
TARGET AMOUNT BID AMOUNT ACCEPTED AMOUNT
Rs.9,396 Mln. Rs. 25,650 Mln. Rs.4,950 Mln



MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

07 Jan 

6,000 Mln

T-Bill

24 Jan 

5,650 Mln




REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

03.00

07.25

12.95

1 Week

05.50

06.00

12.95

1 Month

06.50

06.75

11.65

3 Month

07.15

07.10

12.00

6 Month

07.30

07.50

11.85

1 Year

07.80

08.00

12.25




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

1 Month

07.00

07.15

12.65

2 Month

07.00

07.00

11.75

3 Month

07.15

07.10

11.90

4 Month

07.30

07.30

11.85

5 Month

07.30

07.50

11.75