The cut-off yield of Pakistan Investment Bonds (PIBs) declined up to 25 basis points (bps) in its auction held Wednesday amid expectations for a reduction in the key policy rate. Auction for the sale of Pakistan Investment Bonds for 3-, 5-, 10-, and 20-year maturity was held on September 9, 2015 with coupon rates as 8.75 percent, 9.25 percent, 9.75 percent and 10.75 percent, respectively.
Overall, bids amounting to Rs 252.768 billion or total realized amount of Rs 270.840 billion were received for 3-, 5- and 10-year long-term investment bonds. No bid was received for 20-year PIBs. Bids amounting to Rs 151.43 billion were received for 3-year, Rs 82.36 billion for 5-year and Rs 18.97 billion for 10-year bond. Out of received bids, the federal government bids amounting to Rs 87.862 (Rs 94.577 billion total realized amount) accepted for 3-, 5- and 10-year long-term government securities against the target of Rs 50 billion set for this auction.
A cut-off yield of 7.3536 percent, down some 25 bps, was fixed for 3-year long-term bond with accepted amount of Rs 45.497 billion (total realized amount). The cut-off yield of 5-year PIBs was set at 8.3338 percent, down 18 bps and its accepted amount was Rs 46.61 billion. An amount of Rs 2.463 billion was borrowed through the auction of 10-year long term papers and its cut-off yield was fixed at 9.3402 percent down from 9.4007 percent.