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Money Market, Forex and General News 04-06-09
Friday, June 5, 2009

MONEY MARKET

State Bank of Pakistan (SBP) conducted a T-Bill auction Yesterday with the settlement date on June 4, 2009. There is a maturity of Rs. 44 billion from the previuos auction. The tenors offered are 3, 6 &12 months.

In the treasury bills (T-bills) auction held yesterday, the Government has raised PkR53.57bn on the three and twelve month tenors. The yield on six month paper declined to 13.1420% from 13.1876%.

The return on one-year paper fell to 13.2481% from 13.2997% while bids for the three-month paper were rejected. In this regard, the SBP raised PkR4.28bn through the six month paper and PkR49.29bn through the twelve-month tenor.

FOREX

The USD / PkR opened at levels of 80.70/75 and went as high as 80.78 and closed at 80.72 / 75.

GENERAL NEWS

As per the fact sheet of Dow Jones- FEAS Composite Index, Pakistan is likely to garner a 9.3% share in the index, fourth largest weight in the index. This development holds symbolic significance as it marks another step towards Pakistan re-emergence on the international radar screen following a period of obscurity since floor imposition.

The material impact of this development should take time to materialize as

1) index tracker of ETFs for newly launched indices take time to evolve;

2) this is predominantly a frontier market index, which as an asset class is less tracked than emerging markets and

3) apart from US, the following of Dow Jones remains limited. While we do not have break down of components, the number of Pakistan stocks in the index is believed to be ~70. However none of the Pakistan stocks have made it to the top 10 weights for the index.

DJ-FEAS Composite is a hybrid of emerging and frontier markets. We examine foreign portfolio numbers since Pakistan’s exclusion from MSCI EM.

Labels: Economy and Business, Pakistan Economy