CAPITAL MARKETS

 

1- FOREX KERB WATCH

2- COT WEEKLY REVIEW

3- FINEX WEEK

4. STOCK WATCH
5. STOCK MARKET AT A GLANCE

 

FINEX WEEK


By SHABBIR H. KAZMI
Updated May 14, 2005

 

 

Paucity of funds in the inter bank market kept the rates throughout the week at a high level of 8.90%. Due to the liquidity crunch, banks approached the Central Bank for respite. Consequently, discounting was reported throughout the week, with a heavy discounting of Rs33.60 billion reported on Friday. With the overnight rates at the higher side, one and two week funds also changed hands as high as 8.90% and 8.50% respectively.

The most significant feature of the week was the T-bill auction in which the Central Bank, against the maturity of Rs93.40 billion, accepted Rs87.73 billion in three and twelve-month tenors. The State Bank surprised the market by hiking the three-month T-bill yield by 98 basis points i.e. from 6.3933% to 7.3798% and the twelve-month T-bill yield by 100 basis points i.e. from 7.2470% to 8.2477%. The drastic increase in the cut-off was mainly aimed at controlling rising inflation in the country. This move by the State Bank raised expectations about a possible upward revision of the discount rate in the near future. As a result, a sharp rise in the money market rates was observed particularly in the longer tenors of three and six-months. In the three and six-month tenors, bids were available around 8.00% and 8.10% against the offers at 8.50%. Banks were seen inclined to cover their positions to cross over June closing due to which trades in two-months was noted as high as 8.00%.

In the long-term bonds, selling pressure continued. After the T-bill auction, panic selling was noted due to which rates were quoted in the band of 10.50% to 10.75%, but no major trades was noted.

FUTURE OUTLOOK

Rates are likely to remain at the prevailing levels and no respite for borrowers are expected in the week to come.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

08.90

08.50

02.60

2 Year

09.20

08.75

03.50

3 Year

09.40

08.90

03.80

4 Year

09.75

09.30

04.60

5 Year

09.90

09.40

04.93

10 Year

10.75

10.45

06.60

 

 

 


 

AUCTIONS

BID DATE

INSTRUMENT

RESULT

SETTLEMENT

May 11 T-Bill 12 Mth. May 11 May 12
May 11 T-Bill 3 Mth. May 11 May 12

TARGET AMOUNT

BID AMOUNT

ACCEPTED AMOUNT

Rs. 70,000Mln 

Rs. 90,495Mln  

Rs. 87,720Mln

 


 

MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

12 May

93,475 mln.

FIB/PIB

18 May

261 mln.

FIB/PIB

24 May

1,317mln.

 


 

REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

08.50

08.70

00.45

1 Week

08.50

07.25

00.85

1 Month

08.20

06.75

01.60

3 Month

08.15

06.90

01.85

6 Month

08.35

07.30

01.95

1 Year

08.60

07 70

02 20

 

 

 


 

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

1 Month

08.35

07.00

01.70

2 Month

08.25

06.90

01.80

3 Month

07.60

06.90

01.80

4 Month

07.80

07.15

01.90

5 Month

07.85

07.25

01.95