FINEX WEEK

 

 

By SHABBIR H. KAZMI
Updated October 11, 2003

 

The money market remained glued at the higher end of spectrum and overnight activity for most part of the week, was seen in a band of 3.00% and 4.50%. The overnight market eased off slightly on Friday and closed at 2.50%. There was no intervention by the State Bank to stabilize the rates in the market. Traditional outflows were the main reasons behind the current dearth of liquidity in the market. Upward movement was witnessed in one and two week rates from the lows of 1.25% to close at 3.50% and 3.00%, in the respective tenors. The most significant thing about the week was the aggressive trading in the term market. As the market was expecting further upward movement in rates keen borrowing was seen in one and three months. Although borrowing interest was seen in six months at the levels of 1.80% against offers at 2.10%,

 

 

but no activity took place. One month was the most active during the week and saw a hike of around 60 to 70 basis points and funds in this tenor changed hands in the range of 1.90% and 2.00%. The three-month repo market also rose sharply to 1.95% after trading at 1.75% initially.

The secondary market for T-Bill was rather quiet during the week with trades being conducted for the latest one year paper. The issue of 20th March, 2003 and 7th August 2003 changed hands in the narrow band of 1.95% and 2.00% while the October issued papers were traded at 2.05% as well. PIB yields gradually moved upwards from 6.00% to close at around 6.18% at the end of the week. The PIB auction was held during last week and settlement took place on 6th October, 2003. The Central Bank accepted total bids of around Rs. 8.00 billion with a target of Rs. 25.00 billion and did an upward adjustment of 92, 85 and 58 basis points in 3, 5 and 10 years bonds. The break up being Rs. 450.0 million in 3 years at a cut-off yield of 4.1494%, Rs. 1.20 billion in 5 years at 5.1510% and in 10 years the accepted amount was Rs. 5.94 billion at the rate of 6.2511%.

 

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

02.60

02.60

06.60%

2 Year

03.50

03.40

06.90%

3 Year

04.00

04.20

07.10%

4 Year

04.50

04.75

07.60%

5 Year

05.10

05.25

08.10%

10 Year

06.18

06.20

09.35%

 

 

 


 

AUCTIONS

BID DATE

INSTRUMENT

RESULT

SETTLEMENT

Oct 01 T-Bill 03 mth Oct 01 Oct 02
Oct 01 T-Bill 12 mth. Oct 01 Oct 02

TARGET AMOUNT

BID AMOUNT

ACCEPTED AMOUNT

Rs.15,000 Mln.

Rs.25,900 Mln.

Rs.1,500 Mln.

 


 

MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

02 Oct

12,150 Mln.

T-Bill

30 Oct

62,450 Mln.

 


 

REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

00.75

05.00

08.90

1 Week

01.25

03.00

07.50

1 Month

01.60

01.80

06.50

3 Month

01.70

01.85

06.10

6 Month

01.85

02.00

06.20

1 Year

02.25

02.35

06.40

 

 

 


 

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

1 Month

02.00

01.90

07.00

2 Month

01.90

01.85

06.45

3 Month

01.85

01.80

06.25

4 Month

01.85

01.90

06.20

5 Month

01.90

01.95

06.20