Domestic bonds attract $171m in 50 days
KARACHI: Foreign investors poured about $171 million into Pakistan’s government securities during the first 50 days of the current fiscal year, with Treasury bills attracting the bulk of the inflows at $126.9m and long-term Pakistan Investment Bonds (PIBs) drawing $44m. However, the momentum remained concentrated in short-term debt during August, as T-bills attracted another $46.7m in the first…
Foreign investors injected approximately $171 million into Pakistan's government securities within the first 50 days of the current fiscal year, with Treasury bills accounting for the majority at $126.9 million and long-term Pakistan Investment Bonds (PIBs) drawing in $44 million. However, the surge in foreign investment remained concentrated in short-term debt, with T-bills attracting an additional $46.7 million during the initial 21 days of August, while PIBs received no new foreign funding.
The resurgence of interest in domestic bonds can be attributed to the relatively high returns, as yields around 12 percent are considered attractive compared to several international markets. PIBs had been relatively unappealing to foreign investors over the past two years, but the fresh inflows into long-term bonds in the current fiscal year are viewed by market participants as a positive development.
During the initial 50 days of the fiscal year, foreign investors also poured $82.8 million into the equity market, leading to a total inflow of around $253 million across equities, T-bills, and PIBs. Cumulative outflows during the period amounted to approximately $214 million. T-bills recorded inflows of $126.9 million and outflows of $81.4 million, while PIBs saw inflows of $44 million and outflows of $64 million.
Market analysts expressed optimism about the return of foreign investment to long-term PIBs, believing that matured amounts are being reinvested. Gulf countries, traditionally significant investors in Pakistan's domestic debt market, have experienced changes due to the ongoing conflict between the US and Iran, which has impacted the incomes of oil-producing nations. In the case of the UAE, T-bill inflows stood at $10 million against outflows of $10.4 million, while PIBs saw equal inflows and outflows of $20 million.
The United Kingdom was one of the more active investors in T-bills, investing $51.4 million during the 50-day period against outflows of $28.5 million and making no investment in PIBs. The United States invested $23 million in T-bills with no outflow recorded during the period and also invested $6 million in PIBs against outflows of $1.9 million. Bahrain invested $20 million in T-bills, while outflows amounted to $42.5 million, indicating that matured holdings were withdrawn.
Written by urgent.news from Dawn Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
