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% |
