T-bills cut-off yields reduced – Alfalah Securities Limited
Karachi: The cut-off yields of Market Treasury Bills (T-bills) were reduced in the recent auctions held on Wednesday i.e. January 25, 2012.
According to Alfalah Securities Limited, the auction held on Wednesday showed some excitement from the participants as the bids had reached to PKR 297.365 billion against the State Bank target of PKR 225 billion. 12-month T-bills have achieved the highest investment of worth PKR 46.97 billion and its cut-off yield declined by 16bps from 11.89% to 11.73% while, the bids accepted for 6-months T-bills stood at PKR 32.55 billion and its cut-off yield declined by 20bps to 11.63%.
Furthermore, the cut off-yield for 3- months T-bills was cut by 18 bps to 11.59% through which PKR 27.91 billion were raised. A decline in T-bills rates gives an indication of a modest interest rate cut in the upcoming monetary policy on account of a reduction in CPI inflation which stood at 9.75% in December 2011. A cut in the policy rate would be taken positively by the market as the fair values of stocks would inch upwards thus providing an opportunity to investors to gain handsome returns.