Qudsia Bano

Market experts have noted steady investor interest in Pakistan’s latest auctions of Market Treasury Bills (MTBs) and Pakistan Investment Bonds (PIBs), reflecting cautious optimism in the fixed-income market amid stable monetary conditions.

According to analysts, the latest auction results show sustained demand for short-term government securities, indicating investors’ confidence in the State Bank of Pakistan’s (SBP) current policy stance.

“The yield trends suggest expectations of limited near-term rate cuts, as investors continue to maintain liquidity positions in short-duration papers,” said Fahad Hanif, Head of Research at Ismail Iqbal Securities. He added that the 12-month MTB cut-off yield at 11.2499 percent and the 10-year PIB cut-off price near 94.83 reflect a balance between inflation expectations and the government’s funding requirements.

Ahsan Amin, Finance Manager at Arif Habib Limited, observed that non-competitive bid acceptance and higher participation in the 1-month and 3-month tenors point to a continuing preference for shorter maturities. “The participation trend suggests that investors are prioritizing flexibility amid uncertainty over inflation and policy rate direction,” he said, adding that relatively stable yields also signal improving market sentiment as fiscal pressures ease.

According to SBP data, the total realized value in the latest MTB auction reached PKR 1.77 trillion against a face value of PKR 1.85 trillion. The 1-month tenor attracted the highest participation, with PKR 812 billion in realized value, followed by PKR 288 billion in 3-month and PKR 262 billion in 6-month instruments. Cut-off yields were set at 11.1104 percent for 1-month, 11.0498 percent for 3-month, 11.0448 percent for 6-month, and 11.2499 percent for 12-month tenors.

Weighted average yields remained close to these levels, showing only marginal changes from previous auctions. Non-competitive bids worth PKR 307.8 billion were also accepted across all tenors, with the largest allocation — PKR 261 billion — in the 3-month category, underscoring strong institutional appetite for low-risk instruments. In the Pakistan Investment Bond (PIB) auction, the government raised PKR 147 billion through competitive bids for the 10-year floating rate bond, along with PKR 2.84 billion through non-competitive bids, taking total acceptance to PKR 157.8 billion.

The cut-off price was set at 94.8376, while accepted bids ranged between 94.8937 and 92.9349. Market analysts interpret the auction results as a sign that monetary policy is likely to remain unchanged, with investors showing sustained interest in short-term securities and a more cautious appetite for longer-term maturities.

Credit: INP-WealthPk