Pakistan Investment Bonds

Pakistan Investment Bonds (PIBs) are debt securities issued by the State Bank of Pakistan. These bonds are issued in denominations of multiples of Rs 100,000/- and available in tenors of 3, 5, 10, and 20 years. The yield on these bonds is fixed and disbursed semi-annually. The coupon rate or semi-annual return on these bonds are paid until maturity.
PIBs are a good way to earn competitive returns while keeping the investment secure. These bonds are guaranteed by the Government of Pakistan and therefore the chances of a default or any inefficiency in the payouts from these bonds is very low.
There are two ways to invest in PIBs. Either through Primary Dealers/ Scheduled Banks or through the Secondary Market/ Stock Market. An Investor Portfolio Securities (IPS) Account is opened with the Primary Dealer/ Scheduled Bank which allows an investor to invest in the PIBs. Any person or entity which has an account with a Primary Dealer or a Scheduled Bank offering this facility, can open an IPS account.
After opening the IPS account, an investor needs to instruct his bank (Primary Dealer/ Scheduled Bank) to buy the PIBs from the primary market through “non-competitive bidding” process in regular auctions conducted by the SBP. The non-competitive bidding process allows an investor to take part in the primary auction of the PIB through Primary Dealers.
On the other hand, a simpler way of investing in PIBs is through the secondary market or the Stock Exchange. An investor can instruct his bank to buy the PIB(s) through the Exchange by Exchange certified brokers. This will directly result in the ownership of PIB(s) by the investor without going through the extensive process of non-competitive bidding.
So by investing in PIBs, an investor can reap the rewards of a safe and competitive-returns instrument, earning profit semi-annually at market rate for a period of maturity as deemed fit by the investor. Pakistan Stock Exchange is proud to have PIBs listed on its board for the benefit of the new and the experienced investor.


Comments

Leave a Reply

Your email address will not be published. Required fields are marked *