Pakistan’s Dollar Bonds Drop 6th Day in a Row Amid Political Turmoil

Pakistan’s 2024 bonds have fallen for the sixth consecutive day, according to investors tracking developing-country dollar-denominated bonds, Bloomberg reported on Wednesday.

This drop is being attributed to ongoing clashes between supporters of former Prime Minister Imran Khan and the police. Pertinently, the debt due in 2024 fell by 5 cents to 46 cents on the dollar.

A high-profile investment banker told ProPakistani the bond market sentiment is rated junk for Pakistani maturities following the recent junk classification of Pakistan’s bonds by Moody’s Investors Service. He said bond prices will maintain a slump if the political situation worsens in the coming days.

Other maturities, such as those due in 2025, 2026, 2027, and 2029, were also weakening. The country’s sovereign dollar-denominated bonds slumped by at least 5 cents with the country’s 2024, 2025, 2026, 2027, and 2029 dollar bonds trading at 46.1 cents, 41.8 cents, 39.2 cents, and 38.2 cents on the dollar, respectively.

Pakistan’s political unrest has made investors wary, causing bond prices to fall. The country’s situation remains uncertain, with investors keeping a close eye on any further developments that may have an impact on the country’s financial stability.

Meanwhile, the yield on the 10-year third Pakistan Government International Bond maturing on 15 April 2024 rose by 1,606 basis points to 105.62 percent as of 15 March. The yield on a 10-year bond due September 30, 2025, has risen from 49.7 percent to 53.58 percent. The yield on a 5-year bond due on April 8, 2026, increased from 42.3 percent to more than 45 percent.

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