Short term rates were stuck at the bottom end
of the spectrum with overnight activity at 1.00% and 2.00% levels. The
one week level had moved up to 4.25% from the previous week's levels of
2.00% due to the T-Bill auction while one month trade were also reported
at 5.00%. However, it was the T-Bill auction on which the entire market
had set it eyes. Against the target amount of Rs. 20 billion the market
bid an aggregate amount of Rs. 70.68 billion with SBP accepting a record
amount of Rs. 69.28 billion. The secondary market prior to the auction
had already reflected the possibility of such a participation. It was
the State Bank's decision to maintain cut off levels at 5.8l %, 6.44%
and 6.99% for the three, six and twelve month papers, respectively that
caused a stir. Rates shot up across the board and one week trades were
witnessed at 8.90% while call activity was reported higher as well. This
resulted in an injection of Rs. 18.10 billion for one week at 7.25% that
was still not enough to square off the market. Bond prices did slip
slightly as the T-Bill yields were maintained and no clear sign of a
discount rate cut soon were apparent to the market. The five year PIB to
be issued on the 19th of this month had traded at yields close to 8.75%
but moved back up to 9.00% to settle once again at 8.90%. Ten year PIBs
also had changed hands at lows of yields close to 9.75% but rose back to
the 10.00% level.
Chances of another OMO injection the coming week do
seem a possibility as the market closed short on Saturday as well.
However we feel that the interbank market is sure to feel the impact of
inflows that are expected since the sharp reduction in the rates of
return on National Savings Schemes. The market sentiment may have
slightly changed regarding a discount rate cut, as the auction result
might have given mixed signals, but we still feel that the authorities
are sure to bring about this change.
| YIELD PROFILE |
FEDERAL INVESTMENT BONDS |
| . |
THIS
WEEK |
1
WEEK AGO |
1
YEAR AGO |
|
1 Year |
07.00 |
06.50 |
12.60% |
|
2 Year |
07.50 |
07.00 |
13.10% |
|
3 Year |
07.85 |
07.75 |
13.50% |
|
4 Year |
08.25 |
08.00 |
13.50% |
|
5 Year |
08.90 |
08.85 |
13.90% |
|
10 Year |
09.95 |
09.80 |
14.50% |
| AUCTIONS |
| BID
DATE |
INSTRUMENT |
RESULT |
SETTLEMENT |
| July
10 |
T-BILL |
July
10 |
July
11 |
| TARGET AMOUNT |
BID
AMOUNT |
ACCEPTED AMOUNT |
| Rs.20,000
Mln. |
Rs.70,685 Mln |
Rs.69,285
Mln |
| MATURITIES |
INSTRUMENT |
DATE |
AMOUNT |
|
T-Bill |
11 July |
3,650 Mln. |
|
T-Bill |
25 July |
11,705 Mln. |
REPO RATES |
|
THIS WEEK |
1 WEEK AGO |
1 YEAR AGO |
|
Overnight |
08.95 |
02.00 |
00.75 |
|
1 Week |
08.75 |
03.00 |
03.00 |
|
1 Month |
07.35 |
04.80 |
08.50 |
|
3 Month |
06.30 |
05.20 |
10.65 |
|
6 Month |
06.25 |
05.70 |
11.45 |
|
l Year |
06.75 |
06.25 |
12.20 |
| TREASURY
BILL RATES |
| MATURING |
THIS WEEK |
1 WEEK AGO |
1 YEAR AGO |
|
1 Month |
07.60 |
06.20 |
09.50 |
|
2 Month |
06.70 |
05.10 |
09.75 |
|
3 Month |
06.20 |
05.30 |
10.90 |
|
4 Month |
06.15 |
05.50 |
11.10 |
|
5 Month |
06.25 |
05.70 |
11.40 |
|
