Pakistan's Dollar bond rally expected to extend into 2024 amidst IMF optimism

January 03, 2024 (MLN): Pakistan's dollar bonds will rally for a second year as the government is expected to secure another bailout from the International Monetary Fund, according to investors, as Bloomberg reported.

UBS Asset Management and William Blair Investment Management see their bonds remaining attractive after almost doubling in 2023. Sideman Rafiq Maniya, an independent wealth manager in Karachi, says 95,9 44 be as much as 37% in the next 18 months.

Pakistan succeeded in averting a sovereign default after securing a $3 billion bailout from the IMF in July.

The move catapulted the nation's bonds to rank among the top performers in the world last year. While the gains are expected to moderate, reforms such as raising fuel and electricity prices may open the door for another round of funding.

"They seem committed to this IMF program, and that is a significant point because it suggests there is a big likelihood for them to get another bailout," said Johnny Chen, fund manager at William Blair in Singapore.

"There is also strong potential for reforms to pick up momentum after the elections," he further added.

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