Business

Pakistani bonds surge as yields down to 1,000 basis points

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Digital Desk

KARACHI: Following the increasing trend in the Pakistan Stock Exchange (PSX), Pakistan’s bond market has also surged with annual gains of up to 40%.

In a statement, CEO Topline Securities Mohammed Sohail said, “Pakistan Investment Bonds (PIBs) have delivered annual gains of up to 40%, driven by the faster-than-expected decline in inflation and signs of economic stability. Yields are down 400 to 1000 basis points in one year.”

In October 2023, the yield on the 1-year bond was 23 percent, while the 3-year, 5-year, and 10-year bonds offered 19 percent, 17 percent, and 16 percent, respectively.

The yields, however, sharply declined to 13 percent for the 1-year bond, and 12 percent for the 3-year, 5-year, and 10-year bonds, each.

Apart from that, Pakistan’s dollar-denominated Eurobonds have also shown an improvement with yields dropping from 20-40 percent last year to around 9-11 percent today.

This sharp decline in yields could open the door for the government to tap into commercial borrowing from international markets under more favorable terms, Sohail added.

Digital Desk

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