Karachi August 8 2024: According to the latest data from the Mutual Funds Association of Pakistan (MUFAP), secondary market yields have dropped by up to 55 basis points in a single day following sharp decline in yesterday auciton cut off yields.
The yield on the 3M paper fell by 55 basis points to 18.79 percent, while the 6M paper saw a decline of 47 basis points. The yield on the 12M paper also decreased by 47 basis points, settling at 17.49 percent.
The 3M yield has reached its lowest level since February 19, 2023, when it stood at 18.70 percent. Similarly, the 6M paper’s yield declined to its lowest point since February 15, 2023. The 12M yield dropped to its lowest level since January 18, 2023, when it was 17.19 percent.
In the primary market yesterday, the cut-off yields of shorter tenor papers were down by 50-52 basis points lower than in the previous auction. The 3M and 6M cut-off yields have declined to an 18-month low, last seen in the February 8, 2023 auction. Meanwhile, the 12M cut-off yield reached a 19-month low, with the previous low recorded in the December 28, 2022 auction at 16.85 percent.
Investors bid Rs 1,778 billion against a target of Rs 210 billion. Despite the lower rates compared to the previous auction, investors placed higher bids, expecting monetary easing in the coming months and seeking to lock in investments at the currently higher rates.
