KARACHI: Date of State Bank of Pakistan (SBP) has showed that remarkably high returns on T-bills and PIBs could not attract foreign investors as expected earlier, despite highly attractive returns, foreigners avoided investing in treasury bills (T-bills) and Pakistan Investment Bonds (PIBs) instead they withdrew over $1 billion from these domestic bonds during 2021-22.
During the entire FY22, the domestic bonds received a total of $341.2m ($236.9m in T-bills and $104.3m in PIBs) while the outflows were $1.055bn.
The second half of the outgoing fiscal year proved worst for the country as investments from domestic bonds were withdrawn during this period.
The inflows almost stopped during March and April when the political tensions were at their peak. However, the country received $9.9 million on May 6 after a gap of almost two and half months.
Before the political crisis, Pakistan attracted over $25m in T-bills and $5m in PIB in February.
The T-bills and PIBs rates were regularly increased during the year and in the last auction held on June 29, the 3-month T-bills rate was 15.2 per cent, 6-month 14.8pc and 12-month 14.95pc. The latest PIB rates for three-year, 5-year and 10-year were 13.97pc, 13.18pc and 13.15pc respectively.
The very high rates of these bonds could not attract foreign investment while the total outflows in FY22 including equity ($943m) were almost $2bn. The country attracted $420.36m in equities. The cumulative net outflow (minus inflows) remained $1.237bn during the just-ended fiscal year.
During FY22, inflows (including $199.9m from equity) from the United States were $283.2m while the total outflow was $900.3m reflecting the disappointing situation for the policymakers willing to see high inflows.
The inflows from the United Kingdom were $195.2m while the outflow was $421m. The 3rd largest investor was the UAE with an inflow of $109m while the outflow was $251m.
In June, the T-bills attracted $22m while the outflow stood at $62.8m. While for PIBs there was zero activity in the last month of the outgoing fiscal year. However, the inflow in equity was $31.4m while the outflow was $35.3m.