Auction for PIBs: Rs83bn raised against Rs200bn target

KARACHI: After rejecting T-Bills auction Wednesday, the federal government Thursday raised Rs 83 billion against the target of Rs200 billion through sale of fixed local currency long-term Pakistan Investment Bonds (PIBs).

Analysts said that less than target borrowing is clearly showing the government’s improved liquidity position. Overall bids worth Rs 630.865 billion were received in the auction held on September 19, 2024. 2-year bonds fetched Rs 260.5 billion bids, 3-year Rs 155.957 billion, 5-year Rs 183.5 billion and 10-year long-term bonds attracted bids amounting to Rs 30.88 billion.

Out of received bids, the federal government accepted bids worth Rs 83 billion. This includes Rs 24.481 billion competitive and Rs 58.77 billion non-competitive.

Govt raises Rs140bn through PIBs auction

A drastic fall of up to 335 basis points (bps) was also seen in yields of 3- and 5-year PIBs. Cut-off yield of 3-year bonds declined by 335 bps to 12.8995 percent. Yield of the 5-year bond fell by 190 bps to 13.4 percent and the 10-year bond was set 13.2 percent.

In addition, 2-year zero coupon bonds issued for the first time at a cut off yield of 13.98 percent far lower than expectations.

Interestingly, in the last one year this bond rally has resulted in 3-year bond yield falling from 21 percent to 12.9 percent, 5-year is down from 18 percent to 13.4 percent, while 10-year cut-off yield is down from 16.6 percent to 13.2 percent.