FINEX WEEK

 

 

By SHABBIR H. KAZMI
Updated Oct 26, 2002

 

The interbank market was uneventful the past week. Overnight rates jumped upwards with the market running short of liquidity. This trend developed after the outflow from the system on account of the auction of the Pakistan Investment Bonds. Yet again the ten year paper was sold at significant premiums and much higher than the previous auction.

The overnight market had been in the vicinity of 5.00% and 6.00% in the early parts of the week. One and two week trades were conducted at 6.75% and 7.50% before rates in these tenors also took a hike. The market ran short of liquidity and banks had to resort to the State Bank repo window for discounting. The term market also reacted and the one three and three months tenors rose sharply. One month activity was witnessed at 6.50% before offers moved to the 7.00% mark. However borrowers were witnessed covering heavily in the three month tenor at levels of 6.25% and later as high as 6.40%. Price of the long term paper market continued to rise upwards from the preauction levels. Participation in the auction was witnessed at a maximum of 111.43, an effective yield of 9.23% against the coupon rate of 11.00%. It should be kept in mind that this paper had earlier traded two week prior to the auction at prices of 112.75. However post auction activity was also reported as high as 112.50 but trades were not reported higher.

The market has yet again run short of liquidity and no intervention to ease this off seems to be in the offing and expect the short term market to continue reflecting this sentiment. Significant maturities are due in the first week of November, but keeping in mind that a T-Bill auction is due prior to that, we feel that heavy bidding by banks is expected for the one year paper.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

06.75

06.60

09.00%

2 Year

06.90

07.10

09.75%

3 Year

07.00

07.20

10.50%

4 Year

07.50

07.50

11.00%

5 Year

08.00

08.15

11.50%

10 Year

09.10

09.25

12.50%

 


 

AUCTIONS

BID DATE

INSTRUMENT

RESULT

SETTLEMENT

Oct 16 T-BILL Oct 16 Oct 17

TARGET AMOUNT

BID AMOUNT

ACCEPTED AMOUNT

Rs 15,000 Mln

Rs 28,550 Mln

Rs 19,750 Mln

 


 

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

06.75

01.25

1 Week

08.00

07.00

06.25

1 Month

06.75

06.45

07.20

3 Month

06.40

06.23

07.80

6 Month

06.45

06.30

08.30

1 Year

06.75

06.60

08.55

 

 


 

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

1 Month

07.10

06.90

07.80

2 Month

06.80

06.40

07.60

3 Month

06.45

06.25

07.80

4 Month

06.45

06.30

08.00

5 Month

06.45

06.35

08.10