FINEX WEEK

 

 

By SHABBIR H. KAZMI
Updated Aug 21, 2004

 

MONEY MARKET

Contrary to expectations, the SBP rejected all bids in PIB auction while insignificant raise of 6 basis points was recorded in the six-month T-bill cut-off yield. Participation of Rs.81.085bn was seen in latest auction against target of Rs.35bn. However, six-month T-bill worth Rs.47.40bn was sold at 2.6415%, higher than the previous cut-off of 2.5797%. 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 the band of 0.25% to 1.25%. Later rates hiked and deals were executed at 7.40%. Scarcity of funds compelled the banks to approach SBP for rescue and discounting of approximately Rs.9.0 bn 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 4.75% and 3.75% against offers at 5.25% and 4.25%. Deals were concluded at 5.00% and 4.00% in one and two week respectively. Market participants were seen covering their positions in tenors during the week. One, three and six-month bids were quoted at 1.50%,1.90% and 2.35%, while offers were available in the range of 1.60%, 2.00% and 2.50%. All rates shot up at close with bids quoted at 2.40%, 2.10% and 2.35% against offers at 2.80%, 2.40% and 2.75% for one, three and six-month respectively.

The SBP accepted Rs.47.40bn in the scheduled six-month T-bill auction, which was higher than the targeted amount. Bids for latest six-month T-bill were quoted at 2.60% against offers at 2.55% and trades were executed between 2.57% and 2.60%. Bids and offers moved up and were quoted at 2.75% and 2.60% at the end of the week.

Buying pressure was seen in PIB, which comparatively brought down the rates from last week. lnitial trades were evident in the range of 7.98% and 7.85%, while at close bids and offers were available at 7.74% and 7.69%. Bids for three and five-year bond were quoted at 5.10% and 6.10% against offers at 4.75% and 5.85% at the end of the week.

FUTURE OUTLOOK

Although there is an inflow of Rs.20.0bn of OMO due in the coming week but, short term rates upto one-month are expected to remain at high levels. Continuous demand in PlBs is likely to further brought down the rates next week.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

03.80

03.70

01.60%

2 Year

04.65

04.80

02.25%

3 Year

05.00

05.45

02.65%

4 Year

05.85

06.25

02.65%

5 Year

06.00

06.45

03.65%

10 Year

07.72

07.98

04.65%

 

 

 


 

AUCTIONS

BID DATE

INSTRUMENT

RESULT

SETTLEMENT

Aug 18 T-Bill 06 Mth. Aug 18 Aug 19

TARGET AMOUNT

BID AMOUNT

ACCEPTED AMOUNT

Rs.35,000 Mln. 

Rs.81,085 Mln.  

Rs. 47,400 Mln.

 

 

 


 

MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

05 Aug

Rs. 101,035 Mln.

 


 

REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

04.75

00.25

03.00

1 Week

04.50

00.75

02.50

1 Month

02.35

01.55

01.40

3 Month

02.15

01.95

01.15

6 Month

02.50

02.45

01.25

1 Year

02.90

02.90

01.40

 

 

 


 

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

1 Month

02.40

01.75

01.50

2 Month

02.20

01.85

01.25

3 Month

02.15

01.95

01.15

4 Month

02.35

02.20

01.15

5 Month

02.55

02.45

01.20