FINEX WEEK

 

 

By SHABBIR H. KAZMI
Updated July 24, 2004

 

As expected, the cut-off rate on six-month T-bill moved up by 35 basis points in T-bill auction conducted by SBP on July 21, 2004. Although heavy participation of Rs.97.785bn was seen in latest auction but T-bill worth Rs.67.75bn were sold at 2.5797% against target of Rs.70bn. Excess liquidity in the system kept all rates under pressure at the start of the week but, at close rates touched the higher side of spectrum.

 

 

Initial overnight activity was restricted in a narrow band of 0.25% to 0.50%, later rates hiked and deals were executed in the range of 5.00% and 7.40%. Scarcity of funds compelled the banks to approach SBP for rescue and discounting of Rs.700mn was reported at the end of the week. One and two-week initially traded at 0.75% and 1.00%, while at close bids were quoted at 2.50% and 1.75% against offers at 3.50% and 2.25%. Deals were evident between 2.75% and 2.00% in one and two week respectively. Market participants were seen quiet in tenors throughout the week. One, three and six-month bids were quoted at 1.25%, 1.50% and 1.90%, while offers were available in the range of 1.60%, 1.80% and 2.35%. All rates shot up at close with bids quoted at 1.70%, 1.90% and 2.30% against offers at 2.10%, 2.30% and 2.70% for one, three and six-month respectively.

Latest three and six-month papers were active after the auction. Initial deals in three-month T-bill were witnessed between 2.20% and 1.90%. Latest six-month T-bill was traded in the band of 2.35% and 2.60% however, at close bids and offers were available at 2.70% and 2.50%.

Bond market was seen active and papers with short dated maturities were traded between 5.85% to 6.00%. Offers for ten-year PIBs carrying 14.00% and 13.00% coupons were available in the range of 8.30% and 8.60%. Latest ten-year PIB bids and offers were quoted at 8.50% and 8.30%, while activity took place in the range of 8.35% and 8.40% respectively.

FUTURE OUTLOOK

Inflow of Rs.40bn on coming Monday will ease-off the rates for shorter tenors. Due to rising interest rate scenario, nominal demand is expected in T-bill. Bonds are likely to trade at higher levels in the next week.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

03.80

03.40

01.50%

2 Year

05.75

05.10

01.65%

3 Year

05.95

05.40

02.45%

4 Year

06.90

06.20

02.75%

5 Year

07.00

06.50

03.43%

10 Year

08.40

08.20

04.52%

 


 

 

AUCTIONS

BID DATE

INSTRUMENT

RESULT

SETTLEMENT

Jul 21 T-Bill 03 mth. Jul 21 Jul 22

TARGET AMOUNT

BID AMOUNT

ACCEPTED AMOUNT

Rs.70,000 Mln. 

Rs.97,785 Mln. 

Rs.67,750 Mln

 


 

MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

08 July

78,200 Mln.

 


 

REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

07.20

00.50

00.25

1 Week

02.75

00.75

00.50

1 Month

02.00

01.35

00.75

3 Month

02.15

01.70

00.90

6 Month

02.50

02.20

01.00

1 Year

03.00

02.65

01.50

 


 

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

1 Month

02.30

01.45

00.75

2 Month

02.15

01.60

00.85

3 Month

02.25

01.75

00.90

4 Month

02.35

01.95

01.00

5 Month

02.50

02.15

01.00