FINEX WEEK

 

 

By SHABBIR H. KAZMI
Updated Oct 23, 2004

 

The SBP intervened in the inter-bank money market through an OMO and injected Rs.14.0bn in one-week at the cut-off rate of 4.20% during the week under review. But this inflow did little in the way of easing the liquidity pressure which was mainly due to traditional outflows. To overcome this shortage of funds, banks borrowed approximately Rs.8.6bn from the SBP discount window.

 

 

The inter-bank money market therefore, initially, remained tight and overnight activity took place in the range of 6.75% to 7.40%. The OMO however, helped to ease off rates and overnight deals were executed at 1.50%. On Friday, overnight rates again went up to as high as 6.00% due to the averaging factor.

Shorter tenors up to one-month were seen active. One and two-week closed with deals evident at 3.40% and 3.00% after being traded at 5.25% and 4.00%. One-month activity was initially seen at 3.45% but finally closed with bids quoted at 2.75% against offers at 3.25%. Three and six-month tenor remained inactive.

No interest was witnessed in T-bills. However, bond market was seen very active throughout the week. The hot issue was the latest 10-year bond which was sold in the range of 8.34% to 8.27%.

FUTURE OUTLOOK

This week the market will see the previous week's OMO outflow of Rs.14bn and a T-Bill maturity of Rs.80bn (net inflow of Rs.66bn) by Thursday which is likely to keep the short term rates of up to one month under pressure. A fresh three-month and one-year T-bill auction is due this week and is expected to be sizeable with the cut-off rate expected to move up further due to the rising interest rate scenario.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

04.50

04.50

02.60%

2 Year

05.40

05.40

03.40%

3 Year

05.55

05.65

03.90%

4 Year

06.60

06.65

04.40%

5 Year

06.65

06.70

04.90%

10 Year

08.28

08.36

06.14%

 

 

 


 

AUCTIONS

BID DATE

INSTRUMENT

RESULT

SETTLEMENT

Oct 13 T-Bill 03 Mth. Oct 13 Oct 14

TARGET AMOUNT

BID AMOUNT

ACCEPTED AMOUNT

Rs. 5,000 Mln. 

Rs. 8,285 Mln   

Rs. 1,250 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

00.40

07.00

00.30

1 Week

01.25

05.50

00.50

1 Month

02.85

03.50

01.00

3 Month

03.10

03.40

01.25

6 Month

03.30

03.40

01.50

1 Year

03.90

03.95

01.85

 


 

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

1 Month

02.95

03.60

01.25

2 Month

03.00

03.20

01.30

3 Month

03.10

03.00

01.35

4 Month

03.15

03.10

01.40

5 Month

03.20

03.15

01.50