FINEX WEEK

 

 

By SHABBIR H. KAZMI
Updated Jan 18, 2003

 

The liquidity crunch that the market was facing since the start of January, eased off with rates falling across the board. Short term rates fell to lows of 1.00% and 2.00% while term activity was also conducted at levels that were only witnessed last December. T-Bill rates in the secondary market also slid sharply and activity was yet again conducted at record making levels.

 

 

The overnight market was volatile in the early parts of the week as the exact liquidity status of the market remained undetermined. Rates moved between wide bands of 4.00% and 7.00% but fell on the weekend to close at 1.00% with a general lack of borrowing interest. Brisk trading was reported in the one and the two week tenors in which trading was reported at lows of 1.25% and 2.00%, respectively. Term rates fell off drastically with three month offers touching 3.25% while six month trades were conducted at 3.50% as well. The highlight of the past week was the heavy buying of T-Bills at the new record levels. The buying frenzy for one year and six month papers started in the middle of the week with activity of the respective papers at 3.75% and 3.50% respectively. It was on the weekend that heavy trades were conducted. Buyers hedged themselves from the net auction date of 23rd January and picked up six month papers at yields close to 3.35% and 3.40%. The next auction falling on the 23rd would be that for the one year paper and banks mostly preferred to pick up the six month from the market.

The auction to be conducted next week is sure to witness new cut-off levels for the three and six month papers. We still feel that there is more room for rates coming off in the market and the first reduction in the discount rate for 2003 could be possibility as well.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

03.70

04.00

07.75%

2 Year

04.10

04.20

09.00%

3 Year

04.30

04.40

10.00%

4 Year

04.40

04.40

10.00%

5 Year

04.60

04.65

10.50%

10 Year

05.40

05.20

11.75%

 

 

 


 

AUCTIONS

BID DATE

INSTRUMENT

RESULT

SETTLEMENT

Jan 08 T-Bill 06 mth. Jan 08 Jan 09

TARGET AMOUNT

BID AMOUNT

ACCEPTED AMOUNT

Rs.32,000 Mln. 

Rs.60,204 Mln. 

Rs.33,800 Mln.

 


 

MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

09 Jan 

39,330 Mln

T-Bill

23 Jan

15,800 Mln.

 

 

 


 

REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

01.00

06.25

01.00

1 Week

01.75

05.75

02.25

1 Month

03.05

04.35

05.10

3 Month

03.30

03.75

06.20

6 Month

03.40

03.75

06.80

1 Year

03.60

03.95

07.25

 


 

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

1 Month

03.65

04.85

05.60

2 Month

03.35

04.00

06.10

3 Month

03.30

03.65

06.30

4 Month

03.35

03.60

06.60

5 Month

03.35

03.60

06.80