Pakistan Investment Bonds attract inflows from Gulf investors

Dawn reported that investors from Gulf countries are increasingly viewing Pakistan's domestic bonds as a secure option amid the ongoing US-Iran conflict. Citing State Bank of Pakistan data released on Monday, the report said Gulf buyers put $129.8 million into long-term Pakistan Investment Bonds during the opening 25 days of September. The UAE led the flows, which the paper linked to bonds offering higher yields and risk-free returns.

In September, Bahrain put $10 million into PIBs and $14 million into T-bills, while the UAE's flows were $110 million into PIBs and $5 million into treasury bills. For the period from July 1 to September 25, PIB investment reached $203.7 million against outflows of $115 million. T-bill investment over the same period stood at $161 million, with outflows of $171 million.

Money market expert S.S. Iqbal said most maturing amounts were being reinvested in domestic bonds and urged the government to make them more attractive to Gulf investors. He also argued that reserves must rise more quickly so that prospective buyers feel their money is secure. Efforts are also under way to favour longer-dated PIBs, which would reduce how often the government must repay maturing debt, and remittances may reach $44 billion in FY27.