CAPITAL MARKETS

 

1- FOREX KERB WATCH

2- COT WEEKLY REVIEW

3- FINEX WEEK

4. STOCK WATCH
5. STOCK MARKET AT A GLANCE
6. PAKISTAN WEEKLY REVIEW

 

FINEX WEEK


By SHABBIR H. KAZMI
Updated May 28, 2005

 

 

MONEY MARKET

The inter-bank money market opened with the intervention by SBP through a OMO in five days in which the SBP accepted total amount of Rs9.40 billion. After this intervention, rates hiked temporarily and as the week progressed, rates started to ease and SBP again conducted an OMO for sixteen days and mopped up Rs8.50 billion. After this outflow from the system some stability was seen in the overnight rates and funds changed hands in the band of 5.00% to 6.00%. Market came under pressure again after the T-bill auction in which the Central Bank accepted a meager amount of Rs510 million against the net inflow of around Rs27 billion. The SBP conducted a third OMO and accepted Rs17.90 billion in two weeks. This outflow of Rs17.90 billion was insufficient to give stability to the rates and overnight market closed at the rock bottom levels of 0.25% to 0.50% respectively. One and two weeks saw aggressive activity mostly in the band of 5.25% to 6.25% in one week and 6.00% to 6.50% in two weeks. Later rates in the specific tenors eased and trades were seen around 4.25% and 5.50% in the respective tenors. One month saw a drop of around 50 basis points. After initially changing hands around 7.00%, lending pressure pushed the rates down and one-month bids were available at 6.40% against the offers at 6.75%.

This week the SBP conducted six-month T-bill auction. Against a pre-auction target of Rs12 billion, the SBP accepted only Rs510 million and raised the cut-off by only 69 points, which was much lower than the expected increase in cut-off. This move by SBP resulted in a sharp decline in the longer tenors of three and six months in the secondary market where prior to T-bill auction bids were available at 7.70% and 7.90% against the offers at 8.00% and 8.20%. Later rates in the respective tenors eased and bids were quoted around 7.10% and 7.40% against the offers at 7.50% and 7.80% respectively. In long-term securities, buying interest was seen due to which yield for the latest ten-year bond dropped to the levels of 9.90% to 10.20% and few deals were struck in the band of 10.00% to 10.10%.

FUTURE OUTLOOK

Due to the prevailing liquidity in the system an intervention by the State Bank is likely in the week to come.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

08.50

08.70

02.90

2 Year

08.65

09.00

03.7S

3 Year

09.00

09.10

04.25

4 Year

09.30

09.40

04.95

5 Year

09.40

09.50

05.25

10 Year

10.20

10.30

07.00

 

 

 


 

AUCTIONS

BID DATE

INSTRUMENT

RESULT

SETTLEMENT

May 25 T-Bill 06 Mth. May 25 May 26

TARGET AMOUNT

BID AMOUNT

ACCEPTED AMOUNT

Rs. 12,000 Mln 

Rs. 22,711 Mln 

Rs. 510 Mln

 


 

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

01.75

05.50

00.25

1 Week

04.00

06.25

01.25

1 Month

06.50

07.25

02.05

3 Month

07.20

07.90

02.45

6 Month

07.50

08.10

02.50

1 Year

07.90

08.55

02.60

 


 

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

1 Month

06.75

07.40

02.25

2 Month

07.15

07.60

02.50

3 Month

07.25

07.55

02.45

4 Month

07.45

07.70

02.45

5 Month

07.55

07.80

02.40