FINEX WEEK

 

 

By SHABBIR H. KAZMI
Updated Sep 07, 2002

 

The week started with overnight rates at the sky-high levels, and initially trades in the market were witnessed in the band of 7.50% and 8.50%. But after the T-bill auction of the week, in which SBP mopped up Rs. 17.60 billion from market which was already not very liquid and secondly also because of State Bank dollar swaps, rates took a hike and funds in

overnight changed hands just below the discount rate at 8.95%. Banks had to approach SBP for respite and discounting ranging with Rs. 9.05 to 8.50 billion was reported during the week.

Due to the prevailing liquidity crunch short term rates remained under pressure, and one and two weeks activity initially took place around 6.50% and 6.25%. Later rates hiked and activity in the respected tenor was seen as high as 7.75% and 7.50%. However, on Friday rates eased and activity was seen around 7.00% and 6.75%. Rates in one month saw a hike of around 50 basis points with trades being executed around 6.30% and remained at the same level till the close of the week. Three and six month rates also hiked since banks maintained the levels near the T-bill cut-offs, borrowing interest was evident at 5.85% and 6.00%, against the offers at 6.10% and 6.30%. This week State Bank conducted its T-bill auction, and heavy participation of around Rs. 60.00 billion was witnessed. Central bank took market by surprise by accepting Rs. 17.60 billion in six months against the pre-auction target of Rs. 6.00 billion and slightly decreased the cut-off yield at 6.4159%. The State Bank also over looked all the bids in three and 12 months.

In the secondary market, T-bill is still very attractive and trades in latest six month T-Bill was witnessed around 6.30%, and buying interest for one year T-Bill is present at 6.70% against the offers at 6.60%. Market is of the view that no major change in the scenario is expected in the week to come and rates will remain at the prevailing levels.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

06.75

06.70

11.00%

2 Year

07.25

07.25

11.50%

3 Year

07.40

07.50

12.00%

4 Year

08.00

08.00

12.00%

5 Year

08.40

08.50

12.50%

10 Year

09.45

09.45

13.00%

 


 

AUCTIONS
BID DATE INSTRUMENT RESULT SETTLEMENT
Sep 04 T-BILL Sep 04 Sep 05
TARGET AMOUNT BID AMOUNT ACCEPTED AMOUNT
Rs.6,000 Mln.   Rs.60,230 Mln. Rs.17,625 Mln.

 


 

MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

05 Sep

5,800 Mln.

T-Bill

19 Sep

16,181 Mln.

 


 

REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

08.25

07.75

11.90

1 Week

07.25

06.50

10.50

1 Month

06.15

06.00

10.00

3 Month

06.00

05.85

09.95

6 Month

06.15

06.05

10.20

1 Year

06.65

06.55

10.65

 


 

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

1 Month

06.50

06.50

11.25

2 Month

06.35

06.20

10.20

3 Month

06.10

06.00

10.25

4 Month

06.20

06.00

10.40

5 Month

06.25

06.10

10.45