Bond Market In Pakistan ( Government and Corporate Bonds)

1. PRESENTED BY:-
1. Muhammad Hanzala
2. Abubakar Ali Toor
3. Rana Usama Saif
4. Muhammad Mubashar
5. Intizar Hussain
PRESENTED TO:-
NISAR AHMAD

2. Final Project
BOND MARKET

3. Bond Market
 Characteristics of Bonds
• Face value
• Coupon rate
• Maturity
Types Of Bonds
• Government Bond
• Municipal Bond
• Corporate Bond

4. Total Size of Local Currency Bond Market, 2015
Percent Share
Country Total Size
(Billion USD)
Government Corporate
China 85.09 19.1 80.9
Hong Kong 633.03 63.6 36.4
Korea 637.86 29.8 70.2
Malaysia 121.79 41.9 58.1
Singapore 83.43 56.2 43.8
Pakistan 6.528 82.87 17.13

5. Size of Local Currency Bond Market as a % of GDP,
2015
Country Government Corporate
China 22.16 12.96
Hong Kong 9.17 38.85
Korea 24.77 58.26
Malaysia 39.1 54.14
Singapore 40.18 31.29
Pakistan 4.4 0.90

6. Size of Local Currency Bond Market as Percentage of
GDP 2015

7. Current Market Situation
THE government raised Rs 225.233 billion from the
Treasury bill, missing its target of Rs 300 billion.
The government borrow Rs1.5 trillion in three
months (Sept-Nov) through the sale of Market
Treasury Bills
The government borrowed Rs67 billion through
Pakistan Investment Bonds

8. Continue…
Pakistan has issued a new 10-year bond of $500
million in the international Euro bond market.
Pakistan raised $1 billion from the international
Islamic bond market by selling its Sukuk papers.

9. Bonds in Pakistan
 The Government
 Market Treasury bill
 Pakistan Investment Bonds
 Federal Investment Bonds
 US Special Dollar Bonds
 Sukuk

10. Market Treasury Bills
Features
• Publish in 2003
• Outstanding amount is Rs
516.268 billion (USD 8.901bn)
• Denomination: issued in
multiples of PKR 50,000
• Tenors 3 ,6 and 12 months
• Coupon Payment: Fixed &
Semi annual
• Income Tax: Tax will be
deducted as per existing law
Benefits
• Guaranteed Repayment
• Higher Returns
• Accepted as collateral
• Liquidity
• Easy Process of Investment:

11. Pakistan Investment Bonds
Features
• Publish in 2003
• Amount was Rs. 228.665
billion USD 3.94 billions
• Denomination issued in
multiples of PKR 100,000
• Tenors: 3 ,5,10 and 20 months
• Interest rate 11.25%- 13.75
• Coupon Payment: Fixed &
Semi annual
Benefits
• Guaranteed Repayment:
Higher Returns:
• Accepted as collateral:
Liquidity
• Easy Process of Investment:
• Investment for medium term to
long term:

12. Federal Investment Bonds
Features
• Publish in 1994
• Amount Rs 292.69 billion 4.14
billions USD
• Tenor:3 , 5, 7 10, 15, 20 & 30
Years
• Interest rates was fixed as
13%, 14% and 15%
• Payments made semi-annually
• Income tax on interest amount
is deducted at 20%.
Benefits
• Nationalization
• Liquidity
• High Interest rate
• Long Term investment

13. US Special Dollar Bonds
Features
• Publish in 2000
• Denomination of US$ 100-
100,000
• Tenor: 5,7,10 years
• Payments are semiannually
• Interest rate 8.25%
• Bonds can be used as
collateral for obtaining loans
• Bonds shall not be cashable in
dollar before the date of
maturity
Benefits
• No maximum limit for the
purchase
• Exempt from Income Tax and
deduction of Zakat
• Exempt from Wealth Tax

14. Sukuk Bonds
Features
• Publish in 2014
• Outstanding amount 2.3$
billion
• Denomination in multiples of
PKR 100,000
• Maturity: 5 years
• Interest rate 6.75% floating
• Coupon payments are semi
annual
• Bonds can be used as
collateral
Benefits
• Islamic Mode of Investment
• Guaranteed Repayment
• Higher Profit
• Liquidity

15. National Saving Certificates
 BAHBOOD SAVINGS CERTIFICATES
• Launched in 2003
• Maturity Date 10 years
• Denominations of Rs.5,000/-, Rs.10,000/-, Rs.50,000/-,
Rs.100,000/-, Rs.500,000 and 10,00000/-
• Profit paid monthly
• Interest rate 9.60%
 DEFENCE SAVINGS CERTIFICATE
• Launched in 1966
• Maturity Date 10 years
• Profit paid yearly
• Interest rate 7.80%

16. Continue…
 SPECIAL SAVINGS CERTIFICATES
• Launched in 1990
• Maturity Date 3 years
• Profit paid six monthly
• Interest rate 6.00%
 REGULAR INCOME CERTIFICATES
• Launched in 1993
• Maturity Date 5 years
• Profit paid monthly
• Interest rate 6.632%

17. Continue…
 PENSIONERS BENEFIT ACCOUNT
• Launched in 2003
• Maturity Date 10 years
• Profit paid monthly
• Interest rate 9.60%
 National Saving Bonds
• Zero coupon Bonds
• No limit of investment

18. Corporate Bonds
Corporate
Bonds
Commercial
Papers
Term
Finance
Certificate

19. Commercial Papers
• Equity is not less than Rs 100 million,
• Minimum credit rating for short term CP should be A-
and for long tenor A
• Tenure 3, 6 and 9 months.
• Less liquidity
• Commercial paper is a low risk investment
• Traded at less than its par value
• Packages Ltd was the first company to raise working
capital through CP

20. Continue…
Wapda Bonds
• Publish in 1987-1988
• Publish six different bonds
• Outstanding amount 23.7 billion
• Maturity 3-7 years
• Interest rate 5%-10%
• Government guaranteed
• Highly demanded

21. Term Finance Certificate
PIA Bonds
• Issued in 2000 and 2003
• First time amount get 2.5 billion
• Second time amount get 15.4 billion
• Interest rate 14%- 16%
• Maturity Date 5 years

22. Continue…
Engro Rupiya Certificates
• Publish in 2011
• Fixed interest rate 14.5%
• Maturity date 3 years
• Rated “AA” which denotes very high credit
quality

23. Banks issues TFC
Sr.N
o
Issuer TFC
issue
Date of issue Tenor Coupon
1 First International
Investment Bank Ltd TFC-II
15 - 29 September,
2001 5 Years 15%
2 Standard Chartered
Bank Pakistan Ltd TFC-I
19-21 December,
2002 5-1/2 year 15.50%
3
Soneri Bank Limited TFC-I 04-05 May 05 8 years
6months kibor +
1.6%
4
Askari Bank Limited
TFC-
II 29-31 Oct 2005 8 years
6months kibor +
1.50%
5
Bank Alfalah Limited
TFC-
III 24-25 Nov 2005 8 years
06months kibor +
.15

24. Continue…
Sr.N
o
Issuer TFC
issue
Date of issue Tenor Coupon
6
Bank Al Habib Limited TFC-II 06-07 Feb 2007 8 Years
6 months KIBOR+
1.95% p.a.
7
Faysal Bank Limited TFC-I 10-12 Nov 2007 7 Years
6 months KIBOR+
1.40% p.a.
8
NIB Bank Limited TFC-I 04-05 Mar 2008 8 Years
6 months KIBOR+
1.15% p.a.
9
Allied Bank Limited TFC-II 27-28 August 2009 10 Years
6 months KIBOR+
1.3%
10
Askari Bank Limited TFC-III
17-18 November
2009 10 Years
6 Month KIBOR* +
2.95%

25. Companies issues TFC
Sr.N
o
Issuer TFC
issue
Date of issue Tenor Coupon
1 Sui Southern Gas
Company Limited TFC-I 17-19 Oct, 1995 5 Years 18.25%
2
Nishat Tek Limited TFC-I 15-16 Jan, 1996 3 Years 18.00%
3
ICI Pakistan Limited TFC-I 26,29,30 Sep, 1996 5 years 18.70%
4 Dewan Salman Fibre
Ltd TFC-I 24-26 May, 1999 5 years 19.00%
5
Atlas Lease Limited TFC-I Sep 26-27, 2000 5 years 15.00%

26. Continue…
Sr.N
o
Issuer TFC
issue
Date of issue Tenor Coupon
6 Shakarganj Sugar Mills
Ltd. TFC-I 09 - 10 Apr, 2001 4 years
(Min)15.00% (Max)
18.75%
7 Dewan Salman Fibre
Ltd TFC-II 21-22 June, 2001 4 Years 16.00%
8
Pakistan PTA Limited TFC-I 01-02 August, 2001 5 Years 16.00%
9 Sitara Chemical
Industries Ltd. TFC-I 19 - 20 June, 2002 5Years
Profit & Loss
sharing formula
10 Engro Chemical
Pakistan Ltd TFC-I 04-05 July, 2002 5Years 15%

27. Primary Dealers of Bonds
 Habib Bank Limited.
 National Bank of
Pakistan
 Pak Oman Investment
Bank.
 United Bank Limited
 JS Bank limited
 Royal Bank of Scotland
 NIB Bank limited
 Bank Al-Falah Limited
 Meezan Bank limited
 Standard Chartered Bank
 Habib Metropolitan Bank
 Citi Bank
 The Bank of Khyber
 MCB Bank Limited
 Soneri Bank limited
 Askari Bank limited
 Burj Bank limited
 Al-barka Bank limited

28. Thank You!