Foreign investment in Pakistan’s domestic bonds remained focused on short-term debt in August, with Treasury bills (T-bills) receiving $46.7 million in fresh inflows during the first 21 days of the month, while Pakistan Investment Bonds (PIBs) attracted no new investment, according to the latest State Bank of Pakistan data.
The renewed interest in government securities has been attributed to relatively high returns, with yields of around 12 per cent remaining attractive compared with those available in several international markets.
PIBs had struggled to attract foreign investors over the past two years. However, fresh investment in long-term bonds during the first 50 days of the fiscal year 2026-27 has been viewed by market participants as a positive development.
Foreign investors also injected $82.8m into Pakistan’s equity market during the period, taking total inflows into equities, T-bills and PIBs to around $253m. Total outflows stood at approximately $214m.
T-bills recorded inflows of $126.9m against outflows of $81.4m, while PIBs attracted $44m and saw withdrawals of $64m.
Market analysts said the renewed interest in long-term PIBs was encouraging, noting that some maturing investments appeared to have been reinvested.
Gulf countries have traditionally been significant participants in Pakistan’s domestic debt market. However, regional developments, including the prolonged US-Iran conflict, have affected the financial position of oil-producing economies.
Among individual investors, the UAE recorded $10m in T-bill inflows against $10.4m in outflows. Its PIB inflows and outflows both stood at $20m.
The UK remained a major investor in T-bills, bringing in $51.4m during the period while withdrawing $28.5m. It made no fresh investment in PIBs.
US investors placed $23m in T-bills with no recorded outflows, while PIB investments stood at $6m against withdrawals of $1.9m.
Bahrain invested $20m in T-bills but recorded outflows of $42.5m. It made no new PIB investments, while $40.2m was withdrawn from the bonds, suggesting the redemption of maturing holdings.
