FINEX WEEK

 

 

By SHABBIR H. KAZMI
Updated January  24, 2004

 

The week was full of events as State Bank conducted its T-bill and the first fifteen and twenty years PlBs auction coupled with an OMO. The inter-bank remained liquid throughout the week and pressure could be seen on the lending side. Activity initially was observed in the band of 1.50% and 2.00%, but after the T-bill auction in which SBP accepted only Rs. 10.00 bn against the heavy maturity of around Rs. 65.00 billion which resulted in a market crash and touched rock bottom levels. SBP conducted OMO to mop the surplus liquidity and accepted total amount of

 

 

Rs.37.50  bn in one week and one month at 1.00% and 1.29% respectively, but no major movements in rates were observed and market remained flooded with liquidity which restricted the rates at the lower end of the spectrum. No major activity was witnessed in the term market but heavy lending pressure was seen in three and six months. However, bids were quoted at 1.25% and 1.50% while offers for both tenors remained at 1.50% and 1.70%. This week PIB auction of fifteen and twenty years was conducted and SBP accepted Rs. 2.90 bn and Rs. 2.61 bn against the target of Rs. 3.00 bn in each tenor with the cut-off yield of 7.80% and 8.80%. After the increment of around 6 basis points in the last six months cut-off, market was expecting an upward adjustment in the cut-off yields of one year and three months papers. But contrary to market expectations, no upward movement was seen in the cut-off yields. State Bank accepted only Rs. 10.00 billion in three months and one year at the cut-off yield of 1.4824% and 1.9734%. Trading in PIB ten years were continued this week as well and activity in the latest ten year PIB was conducted in the band of 6.34% to 6.37% throughout the week. Heavy demand for PlBs ten years which carry 14.00% coupon was noticed where initial trades were executed around 5.72% but later on due to the buying pressure, yields slid and activity took place around 5.65%.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

02.60

02.80

02.85%

2 Year

03.25

03.25

04.10%

3 Year

03.80

03.75

04.20%

4 Year

04.60

04.70

04.50%

5 Year

04.85

04.80

04.60%

10 Year

06.34

06.34

05.05%

 


 

AUCTIONS

BID DATE

INSTRUMENT

RESULT

SETTLEMENT

Jan 21 T-Bill 03 mth. Jan 21 Jan 22
Jan 21 T-Bill 12 mth. Jan 21 Jan 22

TARGET AMOUNT

BID AMOUNT

ACCEPTED AMOUNT

Rs.60,000 Mln. 

Rs.24,450 Mln. 

Rs.10,000 Mln

 

 


 

MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

22 Jan

83,450 Mln.

 


 

REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

00.30

01.75

00.30

1 Week

00.60

01.63

00.75

1 Month

01.00

01.75

01.75

3 Month

01.38

01.50

02.00

6 Month

01.63

01.63

02.30

1 Year

01.90

01.98

02.60

 


 

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

1 Month

01.30

02.00

02.20

2 Month

01.40

01.75

02.10

3 Month

01.50

01.75

02.10

4 Month

01.50

01.70

02.80

5 Month

01.55

01.70

02.20