Pakistan international bond yields fall across all maturities

August 3, 2022 (MLN):  Pakistan’s international bond and Sukuk yields across all maturities declined in the range of 60bps to 453bps on Wednesday compared to a day earlier owing to improved fundamentals backed by a positive statement from IMF that Pakistan has met the final prerequisite for the release of $1.1 billion of bailout funds under the seventh and eighth reviews.

 The yields of bonds maturing this year fell by 453bps to 42.6% from 47.1% yesterday.

To recall, on July 19, yields on bonds maturing in December this year peaked at 51.3% owing to the rising concerns over the deterioration in the country's external liquidity position and financing conditions since early 2022.

However, an improvement in  July’s trade deficit numbers supported by lower imports have improved the outlook for the country’s current account balance. This has also reduced pressure on the PKR today, as the local unit has appreciated by 9.8 rupees and closed at Rs228.8 against USD.

Meanwhile, the interest rate on 10-year bonds maturing in April 2024 and Sept 2025 declined by 403bps and 164bps to 41.92% and 30.07% respectively from 45.9% and 31.7% recorded on August 2.

Interest rates for 5-year Eurobonds maturing in April 2026 declined by 60bps DoD from 27.45% to 26.85%  while  for 10 years recorded an increase of 16% to 50.6%

The yields for 10-year bonds maturing in Dec 2027 and April 2031 weakened by 69bps and 108bps DoD to 22.3% and 18.55% respectively.

Furthermore, the yield on the 7-year  Pakistan Global Sukuk Programme Company Limited maturing on January 2029 dipped by 70bps to 14.02 as of August 3, 2022, from 14.7% on August 2, 2022.

While the yield on 30-year Eurobonds whose maturities are due on March 2036 and April 2051 decreased by 92bps and 82bps to 17.85% and 18.23% respectively as of August 3, 2022.

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