Bond Yields Skyrocket By Over 200 Basis Points in Latest PIBs Auction

The federal government successfully raised Rs. 466 billion through Pakistan Investment Bonds (PIBs) in the latest auction conducted by the State Bank of Pakistan (SBP) on Thursday, meeting its target despite yields rising by over 200 basis points.

The auction drew overwhelming demand, with total bids reaching Rs. 818 billion—more than double the government’s target.

Competitive bids spanned multiple tenors, while most bids were accepted at the cut-off, signaling strong investor appetite for government paper amid an uncertain macroeconomic environment.

Auction Results

• 2-Year PIB: Cut-off yield surged to 12.5 percent, up 216 basis points from 10.33 percent. Secondary market yield: 11.68 percent (up 82 bps).
• 3-Year PIB: Cut-off at 12.5 percent, rising 225 bps from 10.24 percent; secondary market 11.61 percent (up 89 bps).
• 5-Year PIB: Cut-off 12.5 percent, up 175 bps; secondary market 12.26 percent (up 24 bps).
• 10-Year PIB: NA
• 15-Year PIB: Cut-off 12.40 percent, up 90 bps; weighted average 12.77 percent; secondary market 12.68 percent (down 37 bps).

The government accepted Rs. 42 billion for 2-year PIBs and Rs. 66 billion for the 3-year PIBs while it raised Rs. 34 billion for 5-year paper and Rs. 325 billion for the 15-year PIBs. The government rejected all bids for the  10-year PIBs.

The government raised Rs. 453 billion through competitive bids and Rs. 13 billion through non-competitive bids, taking the total amount raised to Rs. 466 billion.