Karachi September 18 2024: All bids in today’s T-Bill auction were rejected despite government target to raise PKR 475 billion in today’s auction against maturity of PKR 113 billion, according to data released by State Bank of Pakistan.
“With the PIB fixed-rate auction scheduled for tomorrow, we anticipate that, following today’s auction rejection, participants will place bids at lower rates to ensure liquidity is deployed” says Arif Habib Limited in its social media post.
“This trend will aid the government in reducing borrowing costs while keeping its debt portfolio skewed towards longer-term instruments” the post added.
Investors submitted total bids of PKR 1,425 billion, tripling the set target.
The 12-month T-Bill attracted strong interest, with bids amounting to PKR 925 billion, representing 65 percent of the overall bid volume. Bids for the 3-month and 6-month T-Bills reached PKR 222 billion and PKR 279 billion, respectively, accounting for 20 percent of total bids.
Bids for the 3-month T-Bill ranged from 16.9% to 17.4999%, compared to the previous cut-off of 17.4799% and a secondary market yield of 17.23%. Similarly, bids for the 6-month paper varied between 16.6% and 17.9885%, against the last cut-off of 17.7399% and a secondary market yield of 16.76%. For the 12-month T-Bill, bids ranged from 15.98% to 17.4995%, compared to the previous cut-off of 16.9989% and a secondary market yield of 16.18%.
“The bidding pattern suggested that, had the government opted to raise the target amount, cut-off yields would have decreased by 29 to 101 basis points” says Arif Habib Limited note.
