FINEX WEEK

 

 

By SHABBIR H. KAZMI
Updated July 17, 2004

 

Surplus liquidity in the system kept the money market rates under pressure throughout the week. The SBP conducted open market operation on Monday and mopped up Rs. 51 bn in one-week at 1.00%. However, it didn't influence the market and rates continued to remain on the lower side.
The overnight funds traded in the band of 0.15% to 0.60%. Market players were seen interested to borrow

 

 

funds in one and two-week tenor at 0.40% and 0.70%, while offers were quoted at 0.70% and 1.00%. However, deals were executed at 0.50% and 0.75% in the respective tenors. Rates for one month tenor were quoted at 1.10% and 1.50% and no significant activity was witnessed. Three and six-month bids were available at 1.40% and 2.25% against offers at 1.70% and 2.50% and deals were executed at 1.60% and 2.30% respectively. Although heavy demand was seen in short dated T-bill but, trades were insignificant.

Bond market was seen volatile during the week. Yields on the latest three, five and ten-year papers moved above par just after the release of CPI figure and SBP circular regarding security holdings of financial institutions. Latest ten year bond initially traded at 7.95% but at close, bids and offers were quoted at 8.80% and 8.65%. However, trades were seen at 8.70%. During the week ten-year bond carrying 13.00%, 11.00% and 9.00% coupon, traded in the range of 8.30% to 8.80%. Bids for three and five-year papers were available at 6.15% and 7.10% against offers at 6.00% and 6.90%.

FUTURE OUTLOOK

Upcoming maturities of Rs.95bn is likely to keep the overnight and term rates at the lower level. In the coming week six month T-bill auction is due and an appreciation of 20 to 25 basis points is expected. Buying pressure is also expected in short dated T-bills.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

03.40

03.30

01.65%

2 Year

05.10

04.50

02.00%

3 Year

05.40

05.10

02.45%

4 Year

06.20

06.10

02.75%

5 Year

06.50

06.40

03.40%

10 Year

08.20

07.79

04.55%

 


 

 

AUCTIONS

BID DATE

INSTRUMENT

RESULT

SETTLEMENT

Jul 07 T-Bill 03 mth. Jul 07 Jul 08
Jul 07 T-Bill 12 mth. Jul 07 Jul 08

TARGET AMOUNT

BID AMOUNT

ACCEPTED AMOUNT

Rs.60,000 Mln.  

Rs.130,975 Mln.

Rs. 65,500 Mln

 


 

MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

08 July

78,200 Mln.

 


 

REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

00.50

00.15

00.50

1 Week

00.75

00.50

00.50

1 Month

01.35

01.25

00.95

3 Month

01.70

01.65

01.10

6 Month

02.20

02.05

01.25

1 Year

02.65

02.65

01.50

 


 

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

1 Month

01.45

01.35

01.10

2 Month

01.60

01.65

01.15

3 Month

01.75

01.75

01.15

4 Month

01.95

01.85

01.20

5 Month

02.15

02.10

01.25