FINEX WEEK

 

 

By SHABBIR H. KAZMI
Updated July 03, 2004

 

As expected, excess liquidity in the system resulted in SBP intervention. Accordingly, the Central Bank conducted Open Market Operations in the shorter tenors of up to 4 weeks to primarily provide stability in the rates. It mopped up Rs.40.0bn in the 4-week tenor at 3.05% and Rs.22.8bn in the 1-week tenor at 4.00%. No significant movement was seen in shorter tenors.

 

 

Overnight activity was seen in a tight band of 0.15% to 0.25%. However, on Wednesday, due to the financial closing, rates hiked and overnight activity was seen at 6.00%. Later, rates eased due to excess liquidity, and overnight closed at 3.75%. One and two-week rates remained volatile due to June-end crossing. One-week was initially traded between 2.75% to 5.50% whereas two-week traded between 2.00% to 3.00%. However, near the end of the week rates closed at 0.40% and 0.75% in the one and two-week tenors, respectively. One month activity was reported in a band of 2.00% to 2.25% whereas three-month trades were concluded at 2.10% to 2.30%.

Surplus liquidity in the system created more demand in T-bills. Bids and offers for latest one-year paper were quoted at 2.90% and 2.70% while the three-month T-bill bids were available at 2.20% against offers at 1.90%.

No major activity was seen in the bond market due to June-end. Bids for latest ten-year bonds were quoted at 7.82% and offers were at 7.78%.

FUTURE OUTLOOK

Inflow of funds in the system due to maturities of Rs.101 bn in the coming week is likely to keep rates on the lower side. A three-month and one-year T-bill auction is also due during the coming week and it is expected that the cutoff yields in these tenors are likely to see an appreciation of 25-35 basis points.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

03.40

03.20

02.20%

2 Year

04.60

04.60

02.75%

3 Year

05.50

05.50

02.90%

4 Year

06.10

06.10

03.00%

5 Year

06.50

06.55

03.85%

10 Year

07.78

07.80

04.85%

 

 

 


 

AUCTIONS

BID DATE

INSTRUMENT

RESULT

SETTLEMENT

Jun 23 T-Bill 03 mth. Jun 23 Jun 24

TARGET AMOUNT

BID AMOUNT

ACCEPTED AMOUNT

Rs. 50,000Mln.  

Rs. 41,635 Mln.

Rejected

 

 

 


 

MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

08 July

78,200 Mln.

 


 

REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

00.20

00.20

00.80

1 Week

00.50

02.75

01.00

1 Month

01.40

02.15

01.45

3 Month

01.80

02.15

01.60

6 Month

02.20

02.30

01.65

1 Year

02.70

02.80

02.10

 

 

 


 

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

1 Month

01.65

02.35

01.90

2 Month

01.90

02.20

01.70

3 Month

02.00

02.20

01.70

4 Month

02.10

02.25

01.75

5 Month

02.20

02.30

01.75