Govt raises Rs639bn from PIBs auction

KARACHI: The government raised Rs639 billion from the auction of fixed-rate Pakistan Investment Bonds (PIBs) on Friday.

“In today’s fixed bond PIB auction, the government raised Rs639 billion (competitive and non-competitive face value) against a target of Rs300 billion,” said Topline Securities in a brief note.

“The cut-off yields were up by 5-24 basis points (bps) for two- to five-year bonds and down by 5 bps for 15-year bonds,” it added.

Yields on the two-year PIBs increased by 24 bps to 11.0900 percent. The yields on the three-year bonds also rose by 9 bps to 11.1400 percent. Additionally, the yields on the five-year bonds are up by 5 bps to 11.4399 percent. However, the yields on the ten-year bonds fell by 5 bps to 12.1500 percent.

“Investors turned cautious as SBP maintained the status quo in the recent MPC over concerns of an inflation hike,” said Awais Ashraf, the director of research at AKD Securities Limited.

“The yields for 10 and 15-year bonds are still high when compared to historical averages. The higher spreads reflect investors’ risk-averse behaviour due to two boom-bust cycles in the span of the last 7 years,” Ashraf added.