KARACHI:
Despite strong market liquidity, the government raised Rs 1,645 billion against a maturity of Rs 1,565 billion through the auction of treasury bills (T-bills) and Pakistan Investment Bonds (PIBs), while falling short of its target for both within. reflecting a strategic approach to debt management.
The government raised Rs 1,645 billion through the auction of bills and PIBs held on December 24, said Maaz Azam, Head of Research at Optimus Capital.
Despite strong market liquidity evident in the total bids received, the government accepted a lower-than-target amount for both instruments, said AHL Equities director Tahir Abbas.
In the bond auction, the State Bank of Pakistan (SBP) targeted Rs1,200 billion but received bids of Rs913 billion, which was 76% of the target, according to AHL. Total bids submitted reached Rs 1,694 billion, reflecting oversubscription of 41%.
Cut-off yields remained unchanged from the previous auction held on December 12, 2024, at 11.9999% for three months, 11.9949% for six months and 12.2977% for 12 months.
The weighted average returns were 11.8517%, 11.8901% and 12.1930% respectively. The yield curve showed a peak of 12.50% for the one-year duration, followed by a gradual decline to 12.20% for the 10-year.
In the PIBs (Floating Rate Semi-Annual) auction, the government set a target of Rs 650 billion and accepted bids of Rs 732.5 billion out of the Rs 1,403.5 billion worth of bids submitted.
The two-year PIB saw no bids accepted, while the five-year PIB had Rs 13.2 billion accepted at a cut-off rate of 13.77% and a margin of 0.950%.
The 10-year PIB has attracted significant investor interest, with offers almost four times the target. Of this, Rs 719.3 billion were accepted at a cut-off rate of 14.27% and a spread of 1.450%.
The auction results show strong investor confidence, particularly in long-term instruments like the 10-year PIB.
The oversubscription in both bonds and PIBs underscores the strong market liquidity and investor demand for government securities. Additionally, stable bond yields indicate stable market expectations and economic stability.
Meanwhile, the Pakistani rupee saw a slight improvement against the US dollar, gaining 0.04% in the interbank market on Tuesday.
By the end of the session, the currency closed at 278.47, up 10 paisa against the dollar.
Malik Bostan, President of the Pakistan Forex Association, explained the end-of-year factors for the rupee saying that trade usually slows down after December 25 due to Christmas and remittances from Christian Pakistanis abroad during this period help to stabilise. of the currency.
On the other hand, gold prices in Pakistan fell on Tuesday following a fall in international interest rates after remaining flat in the previous session.
In the local market, the price of gold per tola fell by 800 rupees to 272,600 rupees, according to data provided by the Pakistan Sarafa Gems and Jewelery Association (APGJSA).
Meanwhile, the international price of gold also fell. APGJSA said the global rate settled at $2,614 an ounce after losing $8 on the day.
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