Pakistan plans further Panda bond issuances under an approved RMB 7.2 billion programme as it seeks to become a repeat sovereign issuer in China’s capital market, according to an official statement.

Finance Minister Muhammad Aurangzeb discussed the plans with Chinese Finance Minister Lan Fo’an in Bangkok on Oct 15, on the sidelines of the World Bank Group-IMF Annual Meetings, Gwadar Pro reported on Friday.

Aurangzeb pointed to progress towards macroeconomic stability, while Lan welcomed Pakistan’s renewed access to international capital markets.

The ministers reviewed Pakistan’s inaugural Panda bond issuance and plans for further fundraising in China.

The bond carried a 2.5 per cent coupon and received credit enhancement from the Asian Infrastructure Investment Bank (AIIB).

The Pakistani government said the offering attracted strong investor demand.

Aurangzeb said Pakistan wanted its first issue to lead to regular sales, with continued AIIB support for future offerings.

Panda bonds allow foreign issuers to raise funds in China’s domestic bond market. Further Pakistani issuances would depend on market conditions, borrowing costs and debt sustainability.

The ministers also discussed Pakistan’s return to the Eurobond market after a four-year gap.

They discussed Pakistan’s chairmanship of the Shanghai Cooperation Organisation (SCO) and preparations for a summit and preceding SCO finance ministers’ meeting in Islamabad. Lan said he intended to attend the latter.

The two ministers also discussed a proposed SCO Development Bank.

China encouraged Pakistan to take part in consultations and help build consensus on the proposal. Aurangzeb reaffirmed Pakistan’s support for establishing the bank.

Lan also cited progress towards consensus on proposed route changes for a China-Pakistan highway project.

Aurangzeb briefed Lan on Pakistan’s engagement with Alibaba on digital transformation and artificial intelligence skills training.

He said Pakistan remained committed to implementing the cooperation framework.

Credit: Independent News Pakistan (INP) — Pak-China