FINEX WEEK

 

 

By SHABBIR H. KAZMI
Updated Oct 12, 2002

 

Shortage of funds carried on from the previous week and continued throughout this week forcing rates to stay at the highest levels i.e. near the discount rate. In the absence of the State Bank intervening to inject liquidity the market remained dry. There was no scheduled government securities auction the past week but the announcement of the PIB tax year auction scheduled was made, resulting in hectic trading for the paper between wide bands.

The SBP repo discount window was tapped throughout the week and the figure ranged between Rs. 9 billion and Rs. 15.5 billion. Some banks did cover themselves for one week at levels of 8.75% and 8.00% respectively but these rates fell as the week drew to a close. Maturities expected early in the week saw banks hurriedly placing one week funds as low as 7.50%. This sudden fall in the short term levels had a bearing on the one and two month rates that also eased off after trading as high as 7.00% and 6.60%, respectively. Relatively high bids in the two month tenor were squared off till borrowers quoted bids at around 6.20%. Activity in the three and six month tenors was hard to come by with bids and offers in the band of 6.00% and 6.25% for both the tenors. The announcement of the PIB auction saw heavy interest from certain quarters in the market. It did come as a surprise that even with the Rs. 12 billion target buyers were initially witnessed at a yield/ price of 9.05%/112.65 for the ten year GoP instrument. However this price soon fell to a low of 110.25 by Friday mid day only to be seen touching 111.00 and closing at 110.75 at the end of the week.

The market finally got the news that T-Bill auctions would now be restricted to either the three month and one year papers or the six month paper and would be conducted fortnightly. We feel that there would again be heavy participation in the coming auction. Bids would be highly competitive and banks participating at levels lower than the last auction might be witnessed as well.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

06.60

06.40

11.00%

2 Year

06.90

06.75

11.50%

3 Year

07.10

07.00

12.00%

4 Year

07.50

07.50

12.00%

5 Year

08.10

08.80

12.75%

10 Year

09.35

09.85

13.50%

 


 

AUCTIONS

BID DATE

INSTRUMENT

RESULT

SETTLEMENT

Oct 02 T-BILL Oct 02 Oct 03

TARGET AMOUNT

BID AMOUNT

ACCEPTED AMOUNT

Rs.4,000 Mln 

Rs.55,690 Mln

 Nil

 


 

MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

03 Oct

4,100 Mln.

T-Bill

17 Oct

6,950 Mln.

T-Bill

31 Oct

29,900 Mln.

 


 

REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

08.90

08.90

06.00

1 Week

07.75

08.50

09.25

1 Month

06.60

06.65

09.40

3 Month

06.20

06.00

09.90

6 Month

06.30

06.00

10.30

1 Year

06.50

06.35

10.65

 


 

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

1 Month

07.00

07.00

10.40

2 Month

06.50

06.20

09.80

3 Month

06.30

06.10

10.00

4 Month

06.30

06.10

10.10

5 Month

06.20

06.10

10.25