Govt raises Rs1.09tr via securities

Pakistan's latest government securities auctions attracted strong investor interest on Wednesday, with the State Bank of Pakistan (SBP) raising a total of Rs1.09 trillion through treasury bills and Pakistan Investment Bonds (PIB) Floaters, while cut-off yields declined across all T-bill tenors.

In the treasury bills auction, the government accepted Rs979 billion against a cumulative target of Rs850 billion, whereas total bids amounted to Rs2.56 trillion.

The government accepted Rs87 billion for one-month T-bills at a cut-off yield of 10.20%, marking a decline of 29 basis points from the previous auction. In the three-month tenor, Rs80 billion was accepted against bids of Rs521 billion, with the cut-off yield easing 34 basis points to 10.15%.

The six-month paper saw acceptance of Rs52 billion out of bids worth Rs404 billion as the cut-off yield fell 32 basis points to 10.16%. The bulk of the auction was concentrated in 12-month papers, where the government raised Rs761 billion against bids of Rs1.38 trillion at a cut-off yield of 10.16%, down 33 basis points from the previous auction.

Weighted average yields were largely in line with the cut-off yields, indicating consistent bidding across tenors.

Meanwhile, in the 10-year Pakistan Investment Bonds (Floating Rate – Semi-Annual) auction, the government accepted Rs108 billion against a target of Rs50 billion, while total bids stood at Rs758 billion. The cut-off price was set at 97.20, translating into a cut-off rate of 10.93%. The spread over the benchmark narrowed to 47 basis points, compared with 63 basis points in the previous auction.

Furthermore, the Pakistani rupee edged up slightly against the US dollar on Wednesday, closing at 280.06 in the inter-bank market compared to 280.07 a day earlier.

Meanwhile, gold prices in Pakistan fell, following international market losses as investors booked profits after a recent rally amid mixed global economic signals. Locally, gold per tola dropped by Rs1,200 to Rs466,762, while 10-gram rate fell by Rs1,028 to Rs400,173, according to the All-Pakistan Gems and Jewellers Sarafa Association.

A day earlier, gold had surged by Rs3,200 per tola, reflecting volatility driven by global price movements. Silver, however, remained stable at Rs8,361 per tola.

Internationally, gold slipped over 1% as profit-taking intensified, though weaker-than-expected US private payroll data bolstered expectations of potential Federal Reserve rate cuts. Spot gold touched $4,445 per ounce, up from an earlier low of $4,422. Analysts noted the market remained range bound, with $4,500 and $4,423 being high and low levels, respectively.

Adnan Agar of Interactive Commodities highlighted that Friday's US non-farm payroll data could trigger significant price movements, while silver pulled back from recent highs near $82 to around $77.