Pakistani Eurobond maturing in April 2024 has continued to advance in the past few days with sentiment for the country’s distressed markets getting a boost thanks to the International Monetary Fund and last week’s timely 6-monthly coupon/interest payment on the sovereign bond.
CEO Topline Securities Mohammed Sohail tweeted, “Pakistan Eurobond maturing in April 2024 is rallying again. It is up 10% in the last few days after the timely coupon payment. In the last one year Bond price has rallied 130% from 38 cents to 89 cents”.
“Thanks to IMF short-term term loan in June and government policies, all markets (bond, stock, currency) recovering strongly and investor confidence improving. IMF Loan Review in November and upcoming elections will determine the direction of markets going forward,” he added.
Pakistan’s recent economic upheaval, from its largest-ever currency devaluation seen earlier this year to post-August’s miraculous rebound amid emergency spending cuts and stringent energy sector policies, is the strongest indication that the nuclear-armed country has averted default on its debt repayments (at least on paper).
Recent talks of key targets being fulfilled to tap into the remaining IMF bailout have fueled expectations of disbursements north of a billion dollars after the lender’s team visits the county next week for the economic review of the $3 billion stand-by arrangement (SBA).
Notably, Pakistan has largely met the IMF’s fiscal and monetary targets such as decreasing the budget deficit, raising taxes, tightening monetary policy, increasing foreign exchange reserves, and spiking energy rates beyond the common man’s imagination.
In light of the above, the public consensus is betting big on the South Asian economy’s dollar bonds to surge to higher levels from mid-November onwards in the event the lender okays further disbursement under the ongoing SBA.
Source: Pro Pakistani