Pakistan’s Dollar Bonds Likely to Extend Rally As Market Conditions Improve

Pakistan’s dollar bonds are set to extend their rally as recent credit-rating upgrades and plans to re-enter international debt markets boost investor confidence, reported Bloomberg. The government aims to issue yuan-denominated bonds later this year and return to the Eurobond market in 2026. Investors are confident. In the next six to 12 months,there will be rating upgrades as the first catalyst and market access as the next catalyst for capital appreciation in markets like Pakistan, said Salman Niaz who works at Goldman Sachs. For Pakistan, dollar bonds have delivered a 24.5 percent return this year, the highest in Asia. Rating upgrades by S&P Global and Fitch reflect improved fiscal management and reform efforts, supported by IMF-backed programs and billions in funding secured through tax measures and fiscal discipline. Investors remain optimistic about Pakistan’s prospects, though risks persist from regional tensions and rising energy costs, with oil accounting for around 30% of imports. Market access and continued adherence to reforms are seen as potential drivers for further gains in sovereign debt.