FINEX WEEK

 

 

By SHABBIR H. KAZMI
Updated Mar 29, 2003

 

Volatility was witnessed in the Interbank money market during the last week. The market experienced unusual variation in rates across the board which makes past week significant. Surplus liquidity in the system kept the overnight rates in the band of 0.15% to 1.00% throughout the week. Record decline in term rates were seen as one and two weeks initially traded at 0.75% and 0.90%, saw a sharp fall and traded at the rock bottom levels of 0.15% and 0.25%.

 

 

This fall in rates were temporary, later rates bounced back to the previous levels of 0.75% and 0.90%. One month rates also hiked with deals evident as high as 1.30% which soon eased and close at 1.00%. The most significant part of the week was that banks came forward to cover their positions in long term where aggressive trading was seen in three months and touched the levels of 1.65%. Aggressive trading in T-bills were noted and desperate buying pressure force the yield to fall sharply and trades in one year T-bill was witnessed as low as 1.80%. As the week progressed trades in one year T-bill was seen at the levels of 2.65% this hike in yields were mainly because of the indications given by the authorities that they will take some drastic steps to stabilize the falling yield curve. The State Bank conducted PIB auction in the previous week and accepted the target amount of Rs. 3.00 billion in 3,5 and 10 years at the premium prices of Rs.111.80, Rs. 122.02 and Rs. 140.58 with downward adjustments of 1.87%, 1.73% and 1.54% in the cut-off yields in 3,5 and 10 years bonds respectively. After the result trades in ten year PIB was witnessed as low as 3.95%.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

02.50

02.30

07.10%

2 Year

03.00

02.60

07.65%

3 Year

03.25

02.90

08.65%

4 Year

03.25

02.90

08.65%

5 Year

03.75

03.35

09.65%

10 Year

04.30

04.25

10.75%

 

 

 


 

AUCTIONS

BID DATE

INSTRUMENT

RESULT

SETTLEMENT

Mar 19 T-Bill 12 mth Mar 19 Mar 20
Mar 19 T-Bill 03 mth Mar 19 Mar 20

TARGET AMOUNT

BID AMOUNT

ACCEPTED AMOUNT

Rs.40,000 Mln

Rs.107,075 Mln.

Rs.40,925 Mln

 


 

MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

06 Mar 

18,625 Mln.

T-Bill

20 Mar 

32,990 Mln.

 


 

REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

01.00

00.25

04.50

1 Week

01.00

00.55

05.25

1 Month

01.10

00.90

05.50

3 Month

01.45

01.55

05.80

6 Month

01.60

01.80

06.25

1 Year

02.25

02.35

06.75

 

 

 


 

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

1 Month

01.40

01.40

06.00

2 Month

01.35

01.35

05.90

3 Month

01.60

01.50

05.80

4 Month

01.70

01.55

06.00

5 Month

01.75

01.60

06.25