KARACHI: The government raised Rs158 billion in the Pakistan Investment Bond (PIB) auction on Wednesday against the target of Rs100bn.
Participation in the auction remained strong owing to market expectations of the policy rate peaking following the SBP governor’s comments and the recent 63 day OMO injection.
“Since the last monetary policy announcement tagged with forward guidance by the SBP, followed by a 63 day OMO injection, it is clear that interest rates are expected to remain unchanged in the near term,” Arif Habib Limited Head of Research Tahir Abbas said.
Cut off yields remained flat with the yield for 3 year, 5 year, and 10 year being 11.4 per cent, 11.57pc, and 11.76pc respectively compared to 11.34pc, 11.59pc, and 11.79pc during the November 2021 auction signifying a change of +16 bps, -2bps, and -3bps, respectively.
Over participation explained in numbers
The target for the auction was Rs100bn. Rs30bn was targeted in 3 year, Rs25bn in 5 year, Rs20bn in 10 year, Rs5bn in 20 year, and Rs5bn in 30 year. The participation was a whopping Rs508bn with Rs123.8bn being bid in 3 year, Rs215.3bn in 5 year, Rs163.9bn in 10 year, and Rs5bn in 20 year.
The government accepted Rs32.3bn in 3 year, Rs107.3bn in 5 year, Rs18.5bn in 10 year, and rejected bids for 20 year bonds. This means 26.1pc of the bids in 3 year bonds were accepted, along with 49.8pc of the 5 year bond bids, and 11.3pc of the 10 year bids.
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