Pakistan Invest Bonds attract net inflow of $256m

Foreign investment in Pakistan Investment Bonds (PIBs) witnessed a cumulative net inflow of $256 million during the outgoing financial year as opposed to the trend in Treasury bills (T-bills) and equities.

The SBP latest data revealed that the inflows in equities and T-bills were less than the outflows resulting into negative figures for the two segments.

The long-term domestic bonds PIBs remained attractive for foreign investors as the returns were much higher than the investments in government bonds internationally. Ten-year PIBs offered 9.84 per cent return in the auction held on June 9.

During FY21, inflows in PIBs were $277.5 million while the outflows reached $21.5m. The cumulative net inflow was $256m. The highest inflows in PIBs were from the United States which reached $118.5m in FY21. The inflows from Luxemburg were the second highest with $115.3m but an outflow of $11.7m was also noted from the country.

The inflows in equity and T-bills were much higher than the PIBs but the overall impact was negative due to higher outflows. Net inflow in equities was $681m against the outflow of $1,101m during the entire fiscal year, recording a net outflow of $420m. Similarly, the inflows in T-bills during FY21 were $688m while outflows were $890m. Net outflow was $202m.

The total net inflows of PIBs, T-bills and equities were $1,647m compared to the outflows of $2,013m during FY21. Net outflow of $366.6m was witnessed in FY21. However, in June, the last month of FY21, a change was noted as the net inflow was higher at $163.4m than the outflow of $150.8m.

The major change in June was the large inflows of $93.5m in T-bills compared to the outflow of $40.1m. This big inflow neutralised the impact of huge outflow of $136.8m from equity compared to inflow of just $48m during June. PIBs attracted $22m during the month while the outflow was zero - helping the country to remain on positive side with net foreign investment.

The country could not improve its foreign investment during FY21 which fell by 27.7pc to $1.7bn during the 11 months (11MFY21).

However, May FY21 indicated a change as the FDI jumped by 63pc to $198m compared to $121m in the same month last year.