FINEX WEEK

 

 

By SHABBIR H. KAZMI
Updated Dec 21, 2002

 

The presence of excess liquidity in the market kept rates under pressure. The overnight market was unmoved and one and two week levels were at rock bottom at the start of the week with a nominal hike towards the end. Term rates also saw lows with nominal activity taking place. There was a sharp slide in the yields on T-Bills and PIBs in the secondary market as continuous buying pressure was evident. Fresh auctions were announced for both the instruments in the coming weeks.

Overnight funds traded at 1.00% and l.50% early in the week and later did fall below 1.00% as well. It was only on the weekend that activity was witnessed at close to 3.00% as well. One week activity was restricted at 1.50% while two week rose from 3.00% to touch the 4.00% and 4.25%. Banks were witnessed covering themselves over the year end that caused two week levels to cross 4.00%. One month funds also changed hands with trades between the band of 3.50% and 3.90% with a gradual increase in rates being witnessed. There was no major activity in the three and six month tenors but offers were quoted at 3.75% and 4.00%, with the hike towards the weekend. The T-Bill market was active the past week and the six month paper coupled with 200 days to maturity papers traded below the 4.00% mark. Prices of PIBs on the other hand continued to rise and the 24th October issue traded at close to 140.00 yielding 5.65%. Rs. 15 billion for the three months and one year paper, and Rs. 2 billion for the three, five year and Rs. 1 billion are the pre-auction targets set for the respective GoP instruments.

The State Bank finally broke the news of the much expected reduction in the coupons of the PIBs which now stand at 7.00%, 8.00% and 9.00% for the three, five and ten-year papers, respectively. Participation is expected to be heavy and aggressive for the ten-year paper as evidenced by the demand and the prices prevailing in the secondary market. Participation in the T-Bill auction would not come as a surprise and we feel that buyers would be willing at levels slightly higher than the previous six-month cut-off levels.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

04.10

04.45

08.75%

2 Year

04.40

04.85

09.35%

3 Year

04.60

05.10

10.75%

4 Year

04.80

05.50

11.00%

5 Year

05.00

05.50

11.25%

10 Year

05.70

06.35

12.25%

 


 

AUCTIONS

BID DATE

INSTRUMENT

RESULT

SETTLEMENT

Dec 11 T-BILL Dec 11 Dec 12

TARGET AMOUNT

BID AMOUNT

ACCEPTED AMOUNT

Rs.10,000 Mln 

Rs.41,825 Mln 

Rs.13,250 Mln

 


 

MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

12 Dec 

3,000 Mln.

T-Bill

26 Dec

13,460 Mln.

 


 

REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

03.25

04.25

02.25

1 Week

02.75

04.25

05.50

1 Month

04.25

04.25

07.30

3 Month

03.88

04.20

07.80

6 Month

03.80

04.10

08.05

1 Year

04.25

04.30

08.35

 


 

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

1 Month

04.60

04.75

07.80

2 Month

04.10

04.40

07.80

3 Month

03.90

04.25

07.85

4 Month

03.85

04.10

07.95

5 Month

03.80

04.00

08.00