ISLAMABAD – Pakistan’s dollar bonds are already among the biggest breakout stories in emerging markets this year, and are set for an even more explosive surge as global investors brace for credit-rating upgrades and the country’s long-awaited comeback to international debt markets.
A report shared by Bloomberg reported shared details about intense buzz across global finance circles, as Finance Ministry adviser Khurram Schehzad revealed that Pakistan plans to issue fresh dollar bonds next year, its first attempt in nearly five years. The announcement has electrified the market, with powerhouse institutions like Goldman Sachs Asset Management and UBS Asset Management saying the move could ignite another round of sharp gains in Pakistan’s sovereign debt.
And numbers already look stunning, Pakistan’s dollar bonds skyrocketed 24.5% in 2024, crushing performance of countries with similar credit standings, including Egypt and Argentina.
The rally is so strong that even early believers are doubling down. Danske Bank Asset Management, which bought heavily during Pakistan’s 2022 financial crisis, has increased its holdings several times this year. “We are optimistic Pakistan will stay on the reform track, build stronger dollar reserves, regain market access, and benefit from it,” said Søren Mørch, the firm’s head of emerging markets debt.
Adding to the momentum, Finance Minister Muhammad Aurangzeb confirmed that Pakistan is gearing up for a major return to global capital markets in 2026 under its Global Medium-Term Note (GMTN) program.
Investors were further reassured when Islamabad successfully repaid $500 million Eurobond in September. The 10-year bond, issued in 2015 and maturing on September 30, 2025, was settled without delay.
UBS Asset Management’s Shamaila Khan says the rally is not flash in the pan. “As long as Pakistan sticks to IMF policies—and we believe they’re strongly committed, the outperformance will continue,” she said. She added that renewed market access would eliminate refinancing fears for the next two to three years.
Bloomberg cautioned that geopolitical tensions with India and Afghanistan, as well as any spike in global energy prices, could strain Pakistan’s finances. But so far, investors don’t seem shaken.
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