This document discusses various types of debt instruments issued by the Pakistani government and corporations to raise funds, including Treasury Bills, Federal Investment Bonds, Pakistan Investment Bonds, Term Finance Certificates, and Sukuk Certificates. Federal Investment Bonds were introduced in 1992 and later replaced by Pakistan Investment Bonds in 2000. Term Finance Certificates established the foundation for the corporate bond market in Pakistan in 1995. While sovereign Sukuk markets don't exist, some corporations have issued Sharia-compliant bonds. Commercial Paper is also used by highly rated corporations for short-term funding but the secondary market is underdeveloped. Bond prices are determined by discounting future cash flows at the required yield level, which can be impacted by interest

3.  Treasury Bills (T-bills),
 Federal Investment Bonds (FIBs),
 Pakistan Investment Bonds (PIBs),
 Government Papers and all kinds of debt
instruments issued by Federal Government,
Provincial Governments, Local Authorities.

4. These are short-term debt instrument issued by the
government treasury to raise funds
for the government or to regulate money supply
through open market operations of
the central bank. Their market transactions are
managed by the State Bank of Pakistan
on behalf of the treasury.

5.  Federal Investment Bonds were introduced in 1992
to provide yield curve up to10 years maturity.
Federal Investment Bonds are issued by the
Government of Pakistan. They are similar to
Treasury Bonds. They are issued for three different
time periods:
 (a) When the bonds can mature after 3 years they
are called the sort-term debt of the government
 (b) When they mature after 5 years, they are called
the medium-term debt of the government
 (c) if they mature after 10 years, they are called the
long-term debt of the government

6. In 2000 the State Bank of Pakistan introduced new
long term GOP paper “Pakistan Investment Bond”
(PIB) with maturities of 3, 5, 10 years by replacing
Federal Investment Bonds (FIBs) having same
maturities. The FIBs were discontinued in 1998

7. The "bond fund" or "income funds", offer good
current income but very little
potential for growth. Such funds invest in
government paper, bonds issued
by municipal or local bodies, corporate debts and
in stocks of utility companies,
offering regular return.

8.  Term Finance Certificates (TFCs),
 Sukuk Certificates (Sharia Compliant Bonds),
Registered Bonds,
 Commercial Papers,
 Participation Term Certificates (PTCs)
 All kinds of debt instruments issued by any
Pakistani or foreign company or corporation
registered in Pakistan;

9. Foundations of the corporate bond market were
laid in 1995 with the first issue of Term Finance
Certificates

10. Sovereign Sukuk market does not exist in
Pakistan, though GOP has floated a Sukuk in
the international market in 2005 that fetched
US$ 600 million at 6 months Libor+ 220bps. The
concept used in this issue was Ijarah (Leasing).
On Corporate side three Sukuks have been
issued as under
Issuer Tenor Ruppes in
million
Return
Sitara
Chemicals
5 years 350 Variable
(musharkah)
AL zamin lease 5 years 275 Do
WAPDA
(Quasi)
7 years 8,000 6 months
KIBOR + 35BPS

11. Commercial Paper (CPs) is an unsecured tradable
instrument used by highly rated corporate entities
to raise short tern working capital. CPs are
discount instrument like T-Bill and are issued in
the form of promissory note. They can
even be traded in the secondary market; however
secondary CP market is not yet
developed in Pakistan

12.  Money Market (MM)
 Bond Market
 Equity Market
 Foreign Exchange Market (FX)
 Derivatives Market.

13.  A bond’s price equals the sum of the present
values (PV) of all future cash flows (coupon +
principal) associated with the bond, discounted
at the required yield. The required yield is the
yield that an investor wants from investing in a
bond.

14.  Interest rates
 Demand and Supply
 Economic and political shocks
 Changes in economic policy
 Investor sentiment
 Company news and performance