FINEX WEEK

 

 

By SHABBIR H. KAZMI
Updated Sep 25, 2004

 

MONEY MARKET

Scarcity of funds in the inter-bank money market forced the rates to move upward during the week under review. Banks had to resort for discounting of around Rs.70.0bn for five consecutive days to meet their daily cash requirements. Banks were eagerly waiting for the Central Bank to inject extra liquidity through an OMO but the SBP did not intervene in the market.

 

 

Overnight lending rate hovered around 7.40% during the past week. Banks were seen inclined to cover their positions in shorter tenors of up to one-month, where rates fluctuated by 50 to 75 basis points. One-week funds traded between 6.75% and 6.25% while two-week trades were settled in the range of 5.50% and 4.75%. One-month repo traded between 3.90% and 3.50%. Medium term rates also moved up by 30 basis points where three-month funds changed hand in the range of 3.30% and 3.15%.

T-bill rates swung upwards in the secondary market as the week moved along. Forward dated deals in nine-month to maturity paper were executed at 4.00% while four-and-a-half-month to maturity T-bill was sold at 3.20%.

The 10-year bond that traded at 8.20% earlier ended the week with a yield of 8.40%. Seven-year-to-maturity bond carrying 14% coupon traded at 8.00%.

FUTURE OUTLOOK

The market will see an inflow of Rs.85 billion this week on maturing papers. Auction of three-month and one-year T-bill is also due this week and heavy participation is expected in the three-month paper. We expect cut-off to be around 3.00% and 4.00% in the respective tenors. Rates of up to one week are likely to remain on the higher side. Lending pressure is expected in the three-month tenor, as its maturity will fall before the year-end.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

04.50

04.20

02.60%

2 Year

04.90

04.80

03.60%

3 Year

05.20

05.10

04.25%

4 Year

06.10

06.15

03.75%

5 Year

06.20

06.10

05.10%

10 Year

08.36

08.20

06.40%

 

 

 


 

AUCTIONS

BID DATE

INSTRUMENT

RESULT

SETTLEMENT

Sep 15 T-Bill 06 Mth. Sep 15 Sep 16

TARGET AMOUNT

BID AMOUNT

ACCEPTED AMOUNT

Rs.2,000 Mln. 

Rs.5,700 Mln. 

Rs.1,100 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

07.45

07.00

00.50

1 Week

05.75

06.00

01.25

1 Month

03.40

03.10

01.30

3 Months

03.10

03.00

01.55

6 Months

13.15

03.15

01.85

1 Year

03.75

03.40

02.35

 


 

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

1 Month

03.60

03.40

01.35

2 Month

03.40

03.00

01.55

3 Month

03.10

02.85

01.60

4 Month

03.20

02.95

01.75

5 Month

03.30

03.00

01.85