According to official sources, Pakistan’s Bond Issue is expected to raise $ 1.5 – 2.0 billion during the roadshows. Pakistan had set a target of $ 1.5 – 2.0 billion, however, they were optimistic and expecting to fetch around $3 billion as interest increased in the said instruments.
The yields for 5-year Sukuk Bond issue are expected to be at 6.00%. On the other hand, the yields for 10-year bonds are anticipated to be somewhere around 7.00%. Foreign Investors have been reluctant to invest in 10 year and 30 year issue because of low yields.
Although, due to a lack of interest, Government of Pakistan is expected to drop the 30 – year issue as less than expected bids were received against the target. The fund raiser has been deemed crucial for the economy as foreign reserves continue to deplete at an alarming rate.
According to SBP data, Pakistan FX Reserves declined by more than $ 137 million on the week ending November 17th. SBP has warden of challenges faced by the economy on external front, but hoped that the revival of exports, increasing FDI and other inflows would benefit the economy in long-term.
The balance of payments has been skewed towards imports with the import of infrastructure equipment from China in the wake of Chinese led CPEC projects across Pakistan.
Analysts’ fear that given the result of much anticipated the issue, Pakistan may have to ask International Monetary Fund for a bailout package soon.
