ISLAMABAD: The country’s opposition party, Pakistan Tehreek-e-Insaaf (PTI), has criticised the government for issuing Pakistan’s latest dollar-denominated Eurobond, which got poor response.
The PTI alleged that the bad response from international investors was a virtual vote of no-confidence by global financial markets in its economic policies.
Senior PTI leader Asad Umer, in a statement, said that the extremely poor response from the global markets to the euro bond offering by Pakistan shows that unfortunately the global investors remain unconvinced of the improved economy narrative that the government has been trying to sell.
Pakistan had on September 25 issued a $500 million Eurobond with a maturity of ten years in the international market at a coupon rate of 8.25%.
By comparison, Umar said, countries like Kenya and Sri Lanka had fared far better than Pakistan. Kenya, which had issued its first-ever bond last year had raised $1.5 billion at a yield of 6.875%, while Sri Lanka raised $650 million at a coupon rate of 6.125% just a few months ago, which was lower than what Pakistan will be paying.
The PTI leader said that the response of the international market was consistent with the extremely low level of foreign direct investment (FDI) Pakistan had been receiving in recent years, which had plummeted from $5 billion a few years ago to just $1 billion by fiscal year 2014-15. Additionally, Pakistan’s current account continues to run in deficit coupled with a drop in exports and a worsening energy crisis. He claimed that international firms, which were continuing to shun Pakistan as an investment destination, had seen no fundamental economic reforms taking place in the country.
