The State Bank of Pakistan (SBP) set a cut-off yield of 10.3509 percent, up 22 basis points from previous 10.1244 percent, on 10-year Pakistan Investment Bond (PIB) at the first auction of current fiscal year 2007-08 on Tuesday.
"The revised rates of cut-off yield were as per market expectations and it showed that robust economic growth would go forward in the future," an analyst said. The SBP raised the cut-off yield of all PIBs of three-, five-, 10-, 15-, 20- and 30-year periodicals by 0.0865 percent to 0.3701 percent.
It set cut-off yield of 11.1494 percent on 15-year PIB, marginally higher than 10.9857 percent of June 6. The cut-off yield on 20- and 30-year bonds was set at 11.4016 percent and 11.6802 percent respectively, against 11.2016 percent and 11.5937 percent at previous auction.
For the three- and five-year bonds, the cut-off yield had been set at 9.6881 and 9.8916 percent, respectively, against last auction''s 9.3180 percent and 9.9.5480 percent, respectively. The central bank said it sold total Rs 15.34 billion worth of PIBs on Tuesday against the target of Rs 15 billion, while it had received Rs 27.44 billion worth bids.
"The 10-year PIBs were trading at 10.35 percent yield in the secondary market. Therefore, the current upsurge in the yield was in line with market expectation," said Muzzammil Aslam, analyst at KASB Securities.
He said that the auctions showed only 65 basis points difference between three- and 10-year bonds, which was a minor gap despite the 7 years difference. "The suction also shows that monetary tightening is at its peak level," he added.
Comments
Comments are closed.