FINEX WEEK

 

 

By SHABBIR H. KAZMI
Updated Sep 11, 2004

 

MONEY MARKET

Inter-bank money market was volatile during the past week. Overnight trades were initially executed between 1.50% and 2.50%. As the week progressed, rates hiked as high as 5.00% before closing the week below 1.00%.
Shorter tenors of up to one-month were active during the week. Major activity was seen in one and

 

 

two-weeks at levels of 1.75% to 2.00% while one-month traded between 2.40% to 2.60%. Borrowing pressure forced rates up and trades were concluded in the vicinity of 4.00%, 3.75% and 2.90% in the respective tenors. Three month was also active with initial trades between 2.35% and 2.45% before closing the week between 2.60% and 2.90%. Bids for six-month call were quoted at 3.25% against offers at 3.75%. No major activity was seen in this tenor.

Banks were seen reluctant to quote rates in T-bill. At close, bids for three and six-month maturity papers were available at 2.75% and 3.00% against offers at 2.60% and 2.75% while rates for the latest one-year T-bill were quoted at 3.40% and 3.10%. No significant deals were seen.

Bond rates moved down as compared to last week mainly due to buying interest from the corporate sector. Seven to eight-year maturity papers were the most active during the week. Initial activity was seen in the range of 8.30% and 8.20%. Bids for PIB 10-year issue of 30th October 2001 and 24th December 2001 carrying 13.00% and 12.00% coupon rates were quoted at 8.06% and 8.05%. However, offers were available at 7.98% and 7.95%. Latest 10-year PIB issue of 29th April 2004 was also active with bids and offers quoted at 8.05% and 7.98%. Trades were concluded between 8.03% and 8.00%.

FUTURE OUTLOOK

The money market is likely to remain tight in the coming week. Six-month T-bill auction is due and it is expected that the target amount will be small as no maturity is due. Its cut-off is expected to be about 30 to 40 basis points higher than the previous cut-off. Banks are likely to cover their positions in three and six-month.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

04.10

04.00

02.00%

2 Year

04.75

04.85

02.85%

3 Year

04.95

05.10

03.10%

4 Year

06.00

06.05

03.10%

5 Year

05.95

06.10

04.10%

10 Year

08.00

08.10

05.05%

 


 

 

AUCTIONS

BID DATE

INSTRUMENT

RESULT

SETTLEMENT

Sep 01 T-Bill 03 Mth. Sep 01 Sep 02
Sep 01 T-Bill 12 Mth. Sep 01 Sep 02

TARGET AMOUNT

BID AMOUNT

ACCEPTED AMOUNT

Rs.50,000 Mln 

Rs.62,035 Mln.  

Rs.61,535 Mln.

 


 

MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill  

02 Sep

34,535 Mln.

T-Bill  

30 Sep

85,635 Mln.

 


 

REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

04.00

02.25

00.20

1 Week

04.00

02.25

00.55

1 Month

03.00

02.25

00.85

3 Month

02.75

02.45

01.20

6 Month

02.95

02.90

01.45

1 Year

03.25

03.10

01.80

 


 

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

1 Month

03.00

02.40

01.00

2 Month

02.80

02.60

01.25

3 Month

02.70

02.55

01.30

4 Month

02.75

02.65

01.40

5 Month

02.75

02.70

01.45