Top Investment Agencies See 2024 As A Good Year For Pakistani Dollar Bonds

2024 will be a good year for Pakistan’s dollar-denominated bonds which are poised to rise for a second consecutive year with some of the world’s leading money managers banking on the International Monetary Fund to extend another bailout to the cash-strapped economy, Bloomberg reported on Wednesday. UBS Asset Management and William Blair Investment Management forecast Pakistani bonds to offer attractive yields, with returns of up to 37 percent possible in the next 18 months. Investors are trying to analyze the risks as Pakistan holds elections just one month before the current IMF program expires in March this year. A fund manager at William Blair Investment Management said Pakistan appears devoted to the current IMF program. He said this may help its case to get another deal from the crises lender in the coming months. An analyst at UBS Asset Management said fulfilling IMF conditions has enabled Pakistan to get funding from friendly countries including other multilateral lenders and lowered the risk of default in 2024. Everything is based on the government adhering to the IMF program, which is our baseline scenario, she added. In 2023, an index of Pakistani dollar bonds rose 93 percent, the best performance in emerging markets behind El Salvador. Interim Finance Minister Shamshad Akhtar stated in November that Pakistan may seek a new loan from the IMF. Pakistan avoided a sovereign default after obtaining a $3 billion bailout from the IMF in July. Last year, the move propelled the country’s bonds to rank among the greatest performers in the world. While gains are projected to slow, reforms such as hiking fuel and electricity rates might pave the way for another wave of funding.