FINEX WEEK

 

 

By SHABBIR H. KAZMI
Updated Oct 30, 2004

 

Substantial inflows from maturing T-Bills kept short-term rates under pressure. SBP conducted fresh auction in three-month and one-year T-bill. An OMO was also conducted in one and two-week tenors to mop up excess liquidity from the system where Rs.11.40bn and Rs.14.50bn was accepted in one and two-week at the cut-off rate of 2.00% and 2.45% respectively.

 

 

Surplus liquidity in the system kept rates on the lower side for tenors maturing before end-December. Overnight trades were in the range of 0.50% to 2.50%. It was only on Wednesday when rates swung upwards and overnight deals were seen as high as 7.40%. Banks approached SBP for rescue and as a result discounting of around, Rs.8.0bn took place. Overnight rates moved back to close the week at 0.25%.

The SBP conducted auction in three-month and one-year T-bill during the week under review. Three-month T-bill worth Rs.20.150bn was sold at the rate of 3.3277% while Rs.200mn was sold in one-year at the cut off yield of 3.8635%. The cut-off yield moved up by 35 and 72 basis points from the previous cut-off of 2.9750% and 3.1439% in the respective tenors. Buying interest in the latest three-month T-bill was seen at 3.05% against offers at 2.95%.

The latest 10-year PIB was the most active bond where initial trades were initially dealt between 8.28% and 8.24%. After the T-bill auction result which left excess liquidity in the system, rates moved up and activity took place at 8.35%. Later on, an announcement of PIB auction by SBP with a small target of Rs.3.0bn for this quarter brought the PIB rates down with bids and offers seen at 8.00% and 7.85%.

FUTURE OUTLOOK

Inter-bank market is likely to remain liquid in the coming week with an inflow of Rs.11.40bn from the OMO conducted last week. Shorter tenors maturing before end-December are expected to remain under pressure. T-Bills likely to be in demand while its supply is likely to remain restricted. The 10-year PIB trades may be seen below 8%.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

04.30

04.50

02.40%

2 Year

04.95

05.40

02.85%

3 Year

05.10

05.55

03.80%

4 Year

06.10

06.60

04.40%

5 Year

06.15

06.65

04.80%

 

 

 


 

AUCTIONS

BID DATE

INSTRUMENT

RESULT

SETTLEMENT

Oct 27 T-Bill 12 Mth. Oct 27 Oct 28
Oct 27 T-Bill 03 Mth. Oct 27 Oct 28

TARGET AMOUNT

BID AMOUNT

ACCEPTED AMOUNT

R s.50,000 Mln.  

Rs.43,050 Mln. 

20,350 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

00.40

00.75

1 Week

01.25

01.25

01.25

1 Month

02.60

02.85

01.45

3 Month

03.05

03.10

01.50

6 Month

03.40

03.30

01.60

1 Year

04.20

03.90

02.05

 


 

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

1 Month

02.75

02.95

01.60

2 Month

02.85

03.00

01.50

3 Month

03.05

03.10

01.45

4 Month

03.15

03.15

01.55

5 Month

03.20

03.20

01.60