Islamabad: Pakistan’s bond market is witnessing something unprecedented inNovember.
Global investors have piled $642.5 million into local-currency bonds thismonth alone, more than what they invested in the debt in the past fouryears, according to central-bank data going back to 2015.
Interest in the nation’s bonds has surged this year as the State Bank ofPakistan more than doubled its policy rate to 13.25 per cent — the highestin Asia — over 10 meetings to help stabilise the economy.
That, along with government efforts to improve public finances with supportfrom the International Monetary Fund, has boosted the allure of the notesas the world’s pool of negative-yielding debt deepened, Gulf Times hasreported.
Pakistan “stands out” in a low-yield global environment “following therecent rate hikes and currency adjustment — and more broadly, the reformmomentum under the IMF,” said Bilal Khan, senior economist at StandardChartered Plc in Dubai.
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Foreign flows in November have all gone into Treasury bills — which have amaximum holding period of 1 year — with 55 per cent of them coming from theUK and 44 per cent from the US, the central bank data showed.
The nation’s local-debt market has not traditionally been a magnet forportfolio flows like other emerging markets and wasn’t attractive foryears, said Khan, who visited fund managers in Europe last month inquiringabout Pakistan.
