FINEX WEEK

 

 

By SHABBIR H. KAZMI
Updated Sept 20, 2003

 

The Money Market continued to pass through the flooded liquidity that has prevailing in the market. Again an intervention by SBP in the form of OMO was witnessed and mopped up around Rs. 16.2 bn from the system to stable the market. This out flow turned out to be meager to affect the rates and activity remained at the shallow levels throughout the week. This week the coupon rates on PIBs were finally cut with the much awaited announcement of auction for the three, five and ten year's papers. The week was eventful in a way that SBP also conducted its six months T-bill auction, as expected central bank increase the cut-off yield by around 38 basis points and accepted total amount of Rs. 14.550 bn in six months at the cut-off yield of 1.6581%.

 

 

 Quotes for latest six months issue was present in the band of 1.65% and 1.50% but no significant trades were reported. The cut in the coupon rates on the three, five and ten years PIBs were announced on Thursday. This adjustment in the coupon rates on PIBs has been done for the fifth time since these long term bonds were introduced. The rates on the three, five and ten years paper now stands at 6.00%, 7.00% and 8.00%, resulting in 100 basis points cut. The State Bank also announced a pre-auction target of Rs. 25.00 bn for the coming PIB auction which will be settling on 4th Oct. The first impact of this news was the panic selling in ten years PIB issue of 30/06/03 as banks preferred to off load these papers to avoid further capital losses on these papers, due to which activity in the respected paper were witnessed as high as 5.70%. As market is expecting an upward adjustment in the cut-off yield for the upcoming PIBs auction, short selling was noticed as high as 5.87% for ten years PIB. Initial trades were observed around 5.60%, but later yields dipped and touched the level of 5.45%. Finally bounced back to the higher side and trades were dealt around 5.87% at the end of the week.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

02.25

02.00

06.65%

2 Year

03.30

02.90

07.10%

3 Year

03.90

03.15

07.30%

4 Year

04.25

03.50

08.00%

5 Year

04.85

04.10

08.28%

10 Year

05.90

05.00

10.35%

 


 

AUCTIONS

BID DATE

INSTRUMENT

RESULT

SETTLEMENT

Sep 17 T-Bill 06 mth. Sep 17 Sep 18

TARGET AMOUNT

BID AMOUNT

ACCEPTED AMOUNT

Rs.15,000 Mln.

Rs.35,800 Mln.

Rs.14,550 Mln.

 

 


 

MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

04 Sep

30,650 Mln.

 


 

REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

00.55

00.25

08.90

1 Week

00.70

00.55

07.25

1 Month

01.30

00.85

06.20

3 Month

01.50

01.35

05.95

6 Month

01.65

01.60

06.15

1 Year

01.90

01.85

06.50

 


 

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

1 Month

01.35

01.00

06.75

2 Month

01.45

01.30

06.25

3 Month

01.50

01.35

06.10

4 Month

01.65

01.45

06.15

5 Month

01.70

01.50

06.20