FINEX WEEK

 

 

By SHABBIR H. KAZMI
Updated June 12, 2004

 

MONEY MARKET

Last week's trend in inter-bank money market continued with overnight rates remaining at rock bottom levels. Activity was confined in the band of 0.15% to 0.50% throughout the week. One and two week activity was witnessed in the band of 0.50% and 1.25%. Uncertainty over the interest rates scenario kept the long term rates under pressure due to which activity prior to T-bill auction in one and three month

 

 

was seen around 3.00% and 2.75%. The SBP conducted T-bill auction of three and twelve month. After the increment of around 39 basis points in last six month cut-off, market was expecting considerable adjustment in the cut-off yields of three and twelve months papers. As expected heavy participation of Rs.25.70 billion was noted against the target of Rs.15.00 billion, but contrary to market expectation SBP rejected all the bids. After the auction, rates eased in the long term and activity in one and three months was conducted around 2.10% and 2.35%. Aggressive trading in bond market continued this week as well and high volatility was witnessed. Trading in latest ten year PIB was evident in the vicinity of 7.65% to 7.90%. This week PIB auction of fifteen and twenty year was conducted and State Bank accepted Rs.1.16 billion and Rs. 706 million respectively against the target of Rs.30.00 billion with the cut-off yield of 8.9988% and 9.9942% respectively. Trading prior to the PIB auction was conducted just below the coupon rates i.e. 9.00% and 10.00%. After the auction heavy demand for these papers was seen due to which yields touched the levels of 8.70% and 9.70%.

FUTURE OUTLOOK

Due to the prevailing excess liquidity in the system, Central Bank intervention is likely. However, short term rates are expected to remain at the lower side, but upward trend in long term is likely to continue in the coming days.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

03.40

03.80

02.30%

2 Year

04.50

04.75

02.90%

3 Year

05.25

05.45

03.20%

4 Year

05.70

05.80

03.50%

5 Year

06.15

06.25

03.85%

10 Year

07.82

07.73

04.90%

 

 

 


 

AUCTIONS

BID DATE

INSTRUMENT

RESULT

SETTLEMENT

Jun 08 T-Bill 03 mth. Jun 08 Jun 10
Jun 08 T-Bill 12 mth. Jun 08 Jun 10

TARGET AMOUNT

BID AMOUNT

ACCEPTED AMOUNT

Rs.15,000 Mln. 

Rs. 25,750 Mln. 

Nil

 


 

MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

10 June

47,300 Mln

 


 

REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

00.20

02.50

00.80

1 Week

00.50

02.00

01.00

1 Month

02.70

03.75

01.60

3 Month

02.35

02.85

01.75

6 Month

02.60

03.00

01.85

1 Year

02.95

03.25

02.20

 

 

 


 

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

1 Month

02.80

03.90

01.90

2 Month

02.50

03.10

01.75

3 Month

02.35

02.90

01.75

4 Month

02.40

03.00

01.80

5 Month

02.45

03.05

01.80