Yields on PIBs reduced sharply

[Naveed Yaseen]

KARACHI: The government reduced yields on long-term bonds sharply on Wednesday to lift Rs 20.55 billion.

The yield on 10-year paper dropped drastically to 12.63 percent from 13.24. The government raised Rs 11.38 billion through 10-year paper.

The yield on 3-year paper fell to 12.50 percent from 12.93 percent; 5-year bond to 12.41 percent from 12.94 percent; 7-year bond to 12.58 percent from 13.13 percent; 15-year bond to 13.39 percent from 13.80; 20-year bond to 13.80 percent from 14.24 percent and 30-year bond to 14.30 percent from 14.49 percent.

“This is a continuation of the downward trend in yields,” said a treasury official at a large foreign bank. “Since the interest rates are going to be reduced soon, the yields on long-term bonds have declined further.”

The government raised Rs 2.47 billion through three-year paper, Rs 2.45 billion through five-year paper and Rs 1.47 billion through seven-year paper.

The government raised Rs 47.17 million through 15-year paper, Rs 189.18 million through 20-year paper, and Rs 1.93 billion through 30-year.

Coupon rates were 11.25 percent, 11.50 percent, 11.75 percent, 12.00 percent, 12.50 percent, 13.00 percent and 13.75 percent for papers of 3-, 5-, 7-, 10-, 15-, 20- and 30-year maturity. Banks had offered Rs 46.73 billion in all.

http://www.dailytimes.com.pk/default.asp...2009_pg5_7