FINEX WEEK

 

 

By SHABBIR H. KAZMI
Updated Aug 07, 2004

 

MONEY MARKET

The inter-bank money market week was eventful. SBP conducted T-bill auction and nominal appreciation of 13-14 basis point was recorded. As expected, heavy participation was seen in three month tenor. However, the SBP accepted Rs.50.6 bn at 2.1835% in three-month while nominal amount Rs.0.55 bn was accepted in oneyear at the cut-off yield of 2.8355%. Excess liquidity in the system resulted in SBP

 

 

conducting two OMOs in the shorter tenors of upto 4 weeks. It mopped up Rs.22.0 bn in 4 week tenor at 1.65% and Rs.32.75 bn at 1.25% in 2 week while all bids in one-week were rejected.

The overnight funds initially traded between 4.75% and 2.00%. Later surplus liquidity in the system brought the rates down and overnight activity was conducted as low as 0.25% towards close of the week. In shorter tenors one and two weeks were active with activity confined between 0.75% and 1.00%. One and three-month were the most active tenors during the week with initial deals evident at 2.00% and 2.25%. But with easing of rates, activity took place at 1.20% and 2.0% respectively.

The SBP accepted Rs.51.15 bn in the scheduled T bill auction which was less than the targeted amount. As a result demand for these short term papers was seen in the secondary market. Bids for three-month T-bill were quoted at 2.00% against offers at 1.85%. However, no significant activity was witnessed.

The Central Bank announced PIB auction with a pre-auction target of Rs.1.0bn each for three, five and ten-year papers. Just after the auction announcement, rates for PIBs came down and trades in the latest bond were seen between 8.15% and 7.90%. Bids for three and five-year papers were available at 5.55% and 6.45% against offers at 5.25% and 6.30%.

FUTURE OUTLOOK

The money market is expected to remain liquid next week. However, it is also expected that the SBP could intervene in the market through OMO to stabilize the rates. Overnight and term rates are likely to remain under pressure. Demand for T bill and PIB will keep the rates at lower levels in the coming week.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

03.70

03.80

01.30%

2 Year

04.80

05.45

01.90%

3 Year

05.35

05.75

02.35%

4 Year

06.00

06.50

02.50%

5 Year

06.35

06.65

03.40%

10 Year

07.90

08.45

04.52%

 

 

 


 

AUCTIONS

BID DATE

INSTRUMENT

RESULT

SETTLEMENT

Aug 04 T-Bill 03 mth. Aug 04 Aug 05
Aug 04 T-Bill 12 mth. Aug 04 Aug 05

TARGET AMOUNT

BID AMOUNT

ACCEPTED AMOUNT

Rs.60,000 Mln. 

Rs.146,200 Mln  

Rs. 51,150 Mln 

 


 

MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

05 Aug

Rs. 101,035 Mln.

 

 


 

REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

00.40

02.50

00.30

1 Week

00.75

02.00

00.40

1 Month

01.40

02.00

00.50

3 Month

01.95

02.10

00.70

6 Month

02.40

02.40

00.85

1 Year

02.90

02.70

01.15

 


 

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

1 Month

01.65

02.20

00.65

2 Month

01.85

02.25

00.70

3 Month

01.95

02.20

00.75

4 Month

02.20

02.45

00.75

5 Month

02.45

02.50

00.80