FINEX WEEK

 

 

By SHABBIR H. KAZMI
Updated Jan 15, 2004

 

MONEY MARKET
After a fairly liquid market during the year-end, banks experienced liquidity crunch and this scarcity of funds kept overnight rates at peak levels of 7.40%. Discounting of around Rs.29.50bn during the past week was reported. SBP intervened in the market through an OMO and injected Rs.9.30bn in one-week at 5.25%. This was 2.85% higher than the previous cut-off at 2.40%.

 

 

One and two-week tenors traded between 6.75% and 7.25% during the past week despite the injection of funds through an OMO as the market continued to remain short on funds. Banks were seen interested to cover their positions in one-month with bids and offers quoted at 4.20% and 4.60%. Three-month was also active and borrowing against PIB was seen between 5.00% and 5.25%.

Liquidity shortage forced market participants to stay quiet in T-bills during the week. PlBs saw some interest with initial deals at 7.72%. However, as the weekend approached, buying interest moved the rates down and trades were reported at 7.68%. At close, bids for latest 10-year bond were quoted at 7.68% and offers at 7.62%.

FUTURE OUTLOOK

Net inflow in the market of Rs.81.60bn (T-bill maturity and OMO outflow) is due this week. Short-term rates of up to one-month are expected to ease-off due to this inflow. Auction of three-month and one-year T-bill is also due in the coming week and cut-off yields are likely to move up due to rising interest rate scenario. The three-month paper may see active bids at slightly over 4.00% while the one-year paper may see buying interest at just under 5.00%.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

05.20

05.10

02.85

2 Year

05.40

05.35

03.25

3 Year

05.65

05.65

03.95

4 Year

06.40

06.30

04.70

5 Year

06.62

06.70

04.90

10 Year

07.67

07.73

06.36

 

 

 


 

AUCTIONS

BID DATE

INSTRUMENT

RESULT

SETTLEMENT

Jan 05 T-Bill 06 Mth. Jan 05 Jan 06

TARGET AMOUNT

BID AMOUNT

ACCEPTED AMOUNT

Rs. 10.100Mln 

Rs. 30,900Mln 

Rs. 27,450Mln

 


 

MATURITIES

INSTRUMENT

DATE

AMOUNT

FIB/PIB

12 Jan 

259 mln.

FIB/PIB

28 Jan 

4,730 mln.

T-Bill  

20 Jan 

90,900 mln.

 


 

REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

07.45

07.45

05.00

1 Week

06.75

06.75

03.75

1 Month

04.25

04.55

02.00

3 Month

04.30

04.10

01.80

6 Month

04.55

04.45

01.73

1 Year

04.90

04.65

02.10

 

 

 


 

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

1 Month

04.35

04.75

02.30

2 Month

04.30

03.80

01.90

3 Month

04.30

03.90

01.80

4 Month

04.35

04.00

01.75

5 Month

04.40

04.15

01.75