Gulf investors put $129.8 million into Pakistan Investment Bonds amid US-Iran conflict

According to Dawn, investors from Gulf states bought $129.8 million of long-term Pakistan Investment Bonds during the opening 25 days of September, with the UAE accounting for the bulk. Analysts linked this to appealing local yields and rising uncertainty across the region tied to the US-Iran conflict. State Bank of Pakistan figures show the UAE placed $110 million in PIBs and a further $5 million in treasury bills that month, while Bahrain put $10 million into PIBs and $14 million into T-bills.

The latest fixed-rate PIB auction of September set cut-off yields between 12.4% and 12.5% for maturities of two, three, five and 10 years. Through September 25, 2026, gross foreign purchases of PIBs during FY27's first quarter reached $203.7 million, against $115 million in outflows. Over that span, T-bill inflows came to $161 million, while $171 million was pulled out.

Analysts noted that much of the maturing money was rolled into domestic government paper, with some fresh inflows on top. They also called the sums so far modest against the Gulf's wider investment capacity. Liquid reserves stood at $26.77 billion on September 25, of which $21.44 billion sat with the SBP and $5.33 billion with commercial banks. They added that regional developments could give Pakistan a chance to draw more Gulf capital into state securities if investors keep searching for better yields elsewhere.