Investors pour money in T-bills and PIBs amid rising rate of profit, rupee stability
KARACHI: Foreigners are once again seen gradually increasing investments in the government debt securities like T-bills and Pakistan Investment Bonds (PIBs) amid surge in rate of profit on the securities, return of stability in rupee-dollar parity and Islamabad resuming the International Monetary Fund’s (IMF) loan programme soon.
Although the volume in the securities stood nominal at $17 million in the first 20 days of the ongoing month of March, the number suggests gradually return of foreign investment into Pakistan’s debt market.
Similarly, the net divestment by investors has reduced to $83 million in the past nine months (July 1, 2020 to Mar 21, 2021) compared to net divestment worth $162 million in seven months (July 1, 2020 to February 2, 2021). The net divestment by stood at $266 million in five months (Jul-Nov 2020), according to the State Bank of Pakistan (SBP).
Earlier, foreign investors made an aggressive investment of over $3.5 billion in government securities from July 2019 to February 2020 following Pakistan’s agreement to the stringent IMF bailout package worth $6 billion. They, however, aggressively pulled most part of the investment in the wake of Covid-19 outbreak in Pakistan in February 2020. They aggressive outflow of over $3 billion during the four-month period (Mar-Jun 2020) had badly shaken the rupee against the dollar.
After quite a long time, the situation has gradually turned in favour of Pakistan as suggested by the number particularly for the first 20 days of March. The investors have partly invested more in long-term securities eg PIBs, which were not largely in focus during the July 2019 to Feb 2020 period.
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