Pakistan Sovereign Bonds
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A significant decline of up to 5 percent in its Pakistan Sovereign Bonds over the last 24 hours, as investors express surprise at the challenges posed by the majority of candidates to state-backed political parties. Analysts monitoring developing-country dollar-denominated bonds noted a 1.8 percent drop in the 2024 bond to approximately 96 cents on the dollar. Additionally, the 2025, 2026, and 2027 bonds are currently trading at 84 cents/$, 75.6 cents/$, and 71.6 cents/$, experiencing respective decreases of 4.3 percent, 4.5 percent, and 4.3 percent within the past day.

The bond maturing on January 31, 2029, has seen a 5 percent decline in yield, settling at 80.6 cents on the dollar. Meanwhile, the yield on the coupon due April 8, 2031, has slipped to 64.7 cents, and the yield on the 2036 paper has decreased by 4.5 percent to 65.6 cents on the dollar. The government paper maturing on April 8, 2051, has witnessed a 5 percent decrease, reaching just above 61 cents on the dollar.

Read Also: Pakistan Dollar Bonds: Pakistan’s $25 Billion Challenge and the IMF Solution

In January, Pakistani dollar-denominated maturities experienced a notable 9 percent surge, earning them the status of the best-rated coupons globally. However, this positive trend may be disrupted by reports of rigging and intentional delays by the Election Commission of Pakistan.

Moody’s Investors Services (Moody’s) emphasized in a brief review of the South Asian market that a timely announcement of election results leading to a smooth formation of a new government in Pakistan would reduce policy and political uncertainty. The credit rating agency also noted that the newly elected government would need to establish a longer-term financing plan to address its substantial external debt obligations in the coming years.

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