Rising trend in Pakistan’s global bond prices

Karachi: After the IMF announced that it would consider releasing a package for Pakistan on 25 September, the prices of Sukuk and Eurobonds issued by Pakistan in the global market saw a positive trend.

Topline Research, in its weekly report, mentioned that between 13 September and the previous week, the prices of sovereign bonds rose by 2 to 19 cents.

The data shows that due to delays in Pakistan’s loan program, the prices of some bonds had decreased or remained stagnant.

However, following the IMF announcement, signs of improvement have started to appear.

According to the latest data, the price of Pakistan’s $800 million, 30-year global bond maturing in April 2051, increased by 19 cents per unit, reaching 77 cents per unit. Another 30-year bond maturing in March 2036 saw an 18-cent rise, reaching 75.7 cents per unit.

The price of 10-year, $500 million bonds maturing in September 2025 increased by 2 cents, reaching 97.3 cents per unit.

Speaking to Saad Hanif, Head of Research at Ismail Iqbal Securities, stated that after the IMF’s announcement regarding Pakistan’s loan package, the uncertainty surrounding the Pakistani economy had cleared, which led to the increase in bond prices.

Taher Abbas, Head of Research at Arif Habib Limited, noted that following the IMF announcement, the confidence of global financial institutions and other sources had been restored.

Once the IMF program is approved, Pakistan will be able to obtain loans from other sources as well, increasing the supply of dollars in the local market.

This, in turn, will boost global investors’ interest in bonds issued by Pakistan.

After the IMF program and improved credit rating, the government is expected to return to the global market to sell Panda Bonds, Eurobonds, and Sukuk Bonds.

He added that a reduction in policy rates is also a key reason behind the rising prices of Pakistani bonds.

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