PIBs yields fall

KARACHI: Pakistan Investment Bonds (PIBs) yields declined at an auction on Wednesday, showing bank’s persistent inclination to invest in the long-term government papers despite falling returns.
The State Bank of Pakistan (SBP) sold Rs46.472 billion of three-, five-, and 10-year PIBs. It sold Rs19.964 billion of three-year paper at a cut-off yield of 8.2900 percent, down 8.4980 percent in the previous auction held on February 25.
The cut-off yield on five-year PIBs stood at 8.7476 percent, down from 9.1418 percent and 10-year papers at 9.5002 against 9.8003 percent.
The SBP sold Rs15.430 billion of the five-year papers and Rs11.07 billion of the 10-year papers. It received total bids worth Rs45.60 billion against an auction target of Rs50 billion.
Analysts said the PIBs auction depict rising government’s borrowing requirements to finance the budget deficit, the banks are still parking their liquidity into ‘risk-free’ government papers.