Govt rejects all bids for T-bills

KARACHI: The government rejected all bids for the three-, six-, and 12-month Treasury bills at an auction on Wednesday.

“In a surprising turn of events, all bids in today’s T-Bill auction were rejected. Investors placed total bids of Rs1,425 billion, which is three times the set target,” said Arif Habib Limited in a note.

The pre-auction target for T-bills was Rs475 billion.The 12-month T-bill saw significant interest, with bids totalling Rs925 billion, representing 65 per cent of the total bid amount.For the three-month paper, bids amounted to Rs222 billion, while the six-month bids totalled Rs279 billion, accounting for 20 per cent of the total bids.

“The bid pattern indicated that had the government decided to raise the target amount, the cut-off yields would have declined by 29-101 basis points,” it said.“With the PIB fixed-rate auction scheduled for tomorrow, we believe that after today’s auction rejection, participants will bid at lower rates, ensuring liquidity is invested,” it added.

“This trend will help the government lower its borrowing costs while ensuring its debt profile remains tilted towards long-term instruments.”