FINEX WEEK

 

 

By SHABBIR H. KAZMI
Updated Oct 02, 2004

 

MONEY MARKET

The inter-bank market was characterized by surplus liquidity resulting in rates easing towards the end of the week. Initially, overnight trades were conducted as high as 7.40%. Rates gradually came down to close the week below 1.00%. One and two-week tenors also started the week on the higher side i.e. in a band of 5.75% and 3.75% but eventually eased-off to end at around 1.00%. Similar trend was seen in the one and three-month tenors where deals after being executed at 3.20% and 3.00% closed at 2.25% and 2.70%, respectively.

 

 

The SBP conducted three-month and one-year T-bill auction with a total target amount of Rs.60bn. Participation was low at Rs.41.25bn due to the quarter-end. SBP accepted Rs.17.45bn for the three-month at a cut-off yield of 2.9750% i.e. 31 basis points higher than the previous cut-off of 2.6669%. All bids received in the one-year paper were rejected by the SBP. To mop up excess liquidity, the SBP conducted two week OMO and accepted Rs.3.9bn at 2.0% against a participation of Rs.13bn. The latest three-month T-Bill saw buying interest at 2.70% but little was done. Similarly, one-year paper also saw buying interest at 3.75% but no major deals were executed.

In the bond market, rates declined modestly compared to the previous week. Bids and offers for the 10-year bond ranged between 8.50% and 8.45% where some trades were concluded. Short-dated bonds, particularly the 18-June 2002 three and five-year issues, were active. In the three-year paper, offers were available at 3.75% while offers in the five-year paper were at 5.10%.

FUTURE OUTLOOK

Market is likely to remain liquid with a net inflow of around Rs.45bn last week. We expect lending pressure in all tenors maturing before the year-end. Buying pressure should continue in T-Bills as a result of which rates are expected to stay at the lower side.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

04.30

04.50

02.40%

2 Year

05.00

04.90

03.30%

3 Year

05.30

05.20

04.00%

4 Year

06.20

06.10

04.50%

5 Year

06.30

06.20

05.00%

10 Year

08.48

08.36

06.10%

 

 

 


 

AUCTIONS

BID DATE

INSTRUMENT

RESULT

SETTLEMENT

Sep 29 T-Bill 03 Mth. Sep 29 Sep 30

TARGET AMOUNT

BID AMOUNT

ACCEPTED AMOUNT

Rs.60,000 Mln. 

Rs.41,250 Mln.  

Rs.17,450 Mln. 

 


 

MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill  

20 Oct 

05,196 min.

T-Bill  

28 Oct 

80,250 min.

 


 

REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

00.25

07.45

03.00

1 Week

00.75

05.75

01.50

1 Month

02.00

03.40

01.55

3 Month

02.55

03.10

01.50

6 Month

03.00

03.40

01.65

1 Year

03.60

03.75

02.05

 

 

 


 

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

1 Month

02.25

03.60

01.60

2 Month

02.40

03.40

01.50

3 Month

02.50

03.10

01.50

4 Month

02.70

03.20

01.60

5 Month

03.00

03.30

01.70