Bond Market In Pakistan
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The document provides an overview of Pakistan's bond market, including: 1. Details on the total size and composition of Pakistan's local currency bond market compared to other Asian countries in 2015. 2. Descriptions of the various types of bonds issued by the Pakistani government and corporations, including their features, sizes, and current market situations. 3. An overview of the national savings certificates and corporate bonds available in Pakistan's bond market.
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Bond Market In Pakistan
- 1. PRESENTED BY:- 1. Muhammad Hanzala 2. Abubakar Ali Toor 3. Rana Usama Saif 4. Muhammad Mubashar 5. Intizar Hussain PRESENTED TO:- NISAR AHMAD
- 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
- 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!