Govt raises over Rs 1 tr in Govt auctions

The government raised more than Rs 1.03 trillion on Wednesday through auctions of treasury bills, Pakistan Investment Bonds (PIBs) and Government Ijara Sukuk (GIS). The State Bank of Pakistan (SBP) conducted the three auctions, which attracted strong participation from investors in conventional and Islamic instruments.

In the bond auction, the SBP had targeted Rs 650 billion but received an overwhelming response as bids totaled Rs 1.803 trillion. It received Rs 749 billion in all four tenors. The one-month paper attracted the highest bids of Rs 648 billion against a target of Rs 100 billion, although only Rs 61 billion was accepted at a yield cut of 10.89%, slightly lower than the previous auction. The three-month Treasury bill saw bids of Rs211bn against a target of Rs150bn, with Rs251bn accepted at a fixed yield cut of 11%.

For the half, bids came in at Rs 177 billion against a target of Rs 200 billion, but take-up was limited to Rs 69 billion, also at a cut of 11%. The 12-month paper received significant bids of Rs 767 billion, of which Rs 368 billion were accepted at a yield cut of 11.27%.

Yields across all timeframes recorded small downward adjustments compared to the previous auction and secondary market, indicating continued confidence in short-term government securities. In the PIB segment, the government raised Rs28 billion through the 10-year Pakistan Semi-Floating Bond (PFL-SA) against total bids of Rs524 billion and the target of Rs50 billion. The cut-off value was 95.4, reflecting a cut-off rate of 11.70% with a difference of 0.80% above the benchmark.

Separately, SBP made the outright purchase of Government Ijara Sukuk (GIS) VRR-22 on deferred payment basis (Bai Muajjal). Against the nominal value offered of Rs 176.43 billion, the government accepted Rs 175.16 billion at Bai Muajjal cut-off price of 144.97. The total deferred payment liability stood at Rs 253.93 billion. Sukuk continued to attract strong demand from Shariah-compliant investors.

The Pakistani rupee edged up slightly against the US dollar to close at 280.56 in the interbank market, gaining Rs0.01. The local unit had ended Tuesday at 280.57. Meanwhile, gold prices in Pakistan rose, tracking gains in the international market. The price per tola rose by Rs2,300 to Rs438,862, while 10-gram gold climbed Rs1,972 to Rs376,253, according to the Sarafa Gems and Jewelery Association of Pakistan. International prices rose $23 to $4,165 an ounce.