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KARACHI: The government raised Rs1.437 trillion (realised value) from the auction of market treasury bills on Wednesday, with mixed yields reflecting shifting market expectations for interest rates amid renewed inflationary pressures stemming from volatile energy prices linked to the Middle East conflict.
The one-month T-bill cut-off yield fell 49 basis points (bps) to 10.6982 per cent. The yield on the three-month paper also dropped 35bps to 11.438 percent. The six-month T-bill yield declined 32bps to 11.1549 per cent. However, the 12-month T-bill yield increased 14bps to 11.89 per cent.
The government raised Rs1.486 trillion (face value) from the T-bill auction against the target of Rs1.35 trillion and maturity of Rs1.38 trillion. The auction saw the participation of Rs4.25 trillion.
The mixed movement in T-bill yields suggests that interest rates may have bottomed out, with signals of a potential 50 bps hike emerging from secondary market trends, said Saad Hanif, head of research at Ismail Iqbal Securities. “While short-term yields declined on the back of ample liquidity and strong demand, the uptick in the 12-month yield indicates rising expectations of monetary tightening,” Hanif said.
“This divergence reflects investor caution over medium-term inflation and fiscal risks, implying a shift toward a more hawkish outlook by the SBP,” he added.
The government raised Rs43 billion from the auction of 10-year floating-rate Pakistan Investment Bonds (PIBs), against a total participation of Rs910 billion and a target of Rs50 billion.
Pakistan’s international bonds rallied on Wednesday on news that Saudi Arabia will provide $3 billion in additional support to help the South Asian nation bridge a multi billion dollar gap in its finances linked to a repayment to the United Arab Emirates, Reuters reported.
Dollar-denominated bonds maturing in 2031 and 2036 both gained 0.8 cents, the latter bid at 97.77 cents on the dollar, Tradeweb data showed.
The bonds are trading at their strongest level since late February, when Israel and the United States launched strikes against Iran, setting off a wider conflict across the region.Wednesday on news that Saudi Arabia will provide $3 billion in additional support to help the South Asian nation bridge a multi billion dollar gap in its finances linked to a repayment to the United Arab Emirates, Reuters reported.
Dollar-denominated bonds maturing in 2031 and 2036 both gained 0.8 cents, the latter bid at 97.77 cents on the dollar, Tradeweb data showed.The bonds are trading at their strongest level since late February, when Israel and the United States launched strikes against Iran, setting off a wider conflict across the region.
