FINEX WEEK

 

 

By SHABBIR H. KAZMI
Updated Jan 29, 2004

 

Continuing liquidity crunch in the market kept short-term rates at high levels. Overnight activity throughout the week remained a shade under the discount rate at 7.40% and heavy discounting was reported during the week. During the past week, the SBP conducted an OMO and injected Rs11.90 billion for one week at 5.85%. However, this did not result in any significant change. Overnight rates temporarily eased off with some activity around 6.25% before bouncing back to the high side.

 

 

With overnight rates at peak, one and two-week also remained under pressure and activity in one-week tenor was executed as high 7.40% before easing off to 5.50%. Contrary to the one week scenario, two-week funds initially traded in a band of 5.25% and 5.75% but as the week progressed it firmed to between 6.25% and 6.75%. Heavy trading was seen in the one-month tenor between 5.25% and 6.00%. Three-month tenor saw moderate activity in the band of 4.90% to 5.25% against T-bills and 5.50% to 5.75% against PIBs.

During the past week, SBP conducted an auction for three and twelve-month paper and received total bids of Rs82.50 billion against a pre-bid target of Rs60 billion. Of these bids, the SBP accepted Rs77.750 billion at 4.9891% in twelve-months, which were around 38 and 49 basis points higher than corresponding previous cut-off yields.

FUTURE OUTLOOK

No major inflow is due in the system during this week and with outflows of Rs11.90 billion for the past week OMO, the market is likely to trade at high rates. The six-month T-Bill auction is also due in the coming week. Market is expecting a moderate target and a rise in cut-off in the said auction.

 

 

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

05.30

05.25

02.60

2 Year

05.70

05.40

03.25

3 Year

05.85

05.65

03.80

4 Year

06.50

06.35

04.40

5 Year

06.85

06.65

04.83

10 Year

07.87

- 07.71

06.32

 


 

AUCTIONS

BID DATE

INSTRUMENT

RESULT

SETTLEMENT

Jan 19 T-Bill 03 Mth. Jan 19 Jan 24
Jan 19 T-Bill 12 Mth. Jan 19 Jan 24

TARGET AMOUNT

BID AMOUNT

ACCEPTED AMOUNT

Rs. 60,000 Mln 

Rs. 82,500 Mln 

Rs. 77,750 Mln

 

 

 


 

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

05.50

07.45

00.30

1 Week

05 75

07 45

00.55

1 Month

05.00

05.50

01.20

3 Month

04.85

04.90

01.45

6 Month

05.15

05.00

01.55

1 Year

05.40

05.20

02.00

 


 

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

1 Month

05.30

05.80

01.35

2 Month

04.75

04.70

01.40

3 Month

04.70

04.50

01.45

4 Month

04.75

04.60

01.50

5 Month

04.75

04.65

01.55