FINEX WEEK

 

 

By SHABBIR H. KAZMI
Updated Sep 28, 2002

 

The interbank market went through a liquidity crunch the past week. Short term rates were towards the higher end of the spectrum as overnight levels touched the 8.95% mark with the repo discount window being tapped throughout the week. The three and five year PIB auction managed to wipe out the target amount that caused the start of the crunch in  the market at the end of the financial quarter. There was no intervention by the State Bank to ease off the dryness in the market throughout the week.

The week did start with overnight rates hovering at around 8.50% and 8.75% but soon touched the 8.95% level. The outflow of Rs. 6.79 billion against no maturity was the reason behind rates rising sharply and the system experiencing a shortfall. Throughout the week banks were witnessed approaching SBP for respite and the discounting figure was between the band of Rs. 2.40 billion and Rs. 25.20 billion. One and two week rates also hiked with trades in both tenors being reported at highs of 8.50% and 7.50%, respectively. However it were the tenor rates that actually witnessed a reversal. Three, five and six month rates fell off slightly with moderate activity in all these tenors. Three and five month trades were reported at 6.05% and 6.15% respectively. It was the six month tenor that fell off and activity was witnessed at around 5.75% on Saturday. The PIB auction conducted past week saw aggressive bidding of Rs. 22 billion for the three and five year papers. The three and five year papers were sold at premium prices of 103.96 and 106.95 yielding 7.50% and 8.27%, against the coupon rate of 9.00% and 10.00%, respectively. Furthermore the prices on these papers continued to rise and trading for the five year paper was conducted at 107.80. The short term market is expected to remain lopsided this quarter end. Further we feel an intervention by way of an OMO can be materialized before the T-Bill auction settlement next week on the 3rd of October.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

06.50

06.50

11.00%

2 Year

06.75

07.00

11.50%

3 Year

07.10

07.25

12.00%

4 Year

08.00

08.00

12.00%

5 Year

08.10

08.30

12.50%

10 Year

09.20

09.35

13.00%

 


 

AUCTIONS

BID DATE

INSTRUMENT

RESULT

SETTLEMENT

Sep 18 T-BILL Sep 18 Sep 19

TARGET AMOUNT

BID AMOUNT

ACCEPTED AMOUNT

Rs.16,000 Mln  

Rs.74,975 Mln

Rs.27,150 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

08.90

08.25

01.25

1 Week

08.25

07.38

06.25

1 M'.ath

06.50

06.13

09.00

3 Month

05.60

05.88

09.70

6 Month

05.80

05.98

10.20

1 Year

06.25

06.50

10.60

 


 

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

1 Month

06.80

06.65

10.00

2 Month

06.10

06.10

09.75

3 Month

05.85

06.00

09.80

4 Month

05.75

06.00

10.00

5 Month

05.80

06.05

10.15