Bonds rise on economic optimism

Pakistan’s US dollar-denominated Eurobonds and Sukuks have emerged as some of the world’s best-performing bonds in global markets, driven by optimism surrounding the nation’s domestic macroeconomics amidst the ongoing elections to elect new political governments at the centre and in the provinces on Thursday. The robust rally in these bonds indicates a restoration of foreign investors’ confidence in Pakistan and its future government, which is widely anticipated to unveil a new economic roadmap aimed at addressing the nation’s current economic and financing crises, particularly enhancing its capacity to make foreign debt repayments on time. Arif Habib Limited (AHL) reported that the price of Pakistan’s 10-year Eurobond, valued at $1 billion and maturing in three months on April 15, 2024, surged to a record high of 98.11 cents on February 7, 2024. The bond, which had traded below 50 cents in June 2023, almost halving its face value of $1, has now rebounded significantly, reaching an exit price of 98.11 cents, it was learnt.