Pakistan Tops Dollar Bond Performance in Asia

Despite continued uncertainty, the world’s largest dollar bond investors are continuing to maintain holdings in Pakistan. According to HSBC, Pakistani bonds have returned 35 percent this year, the best performance in Asia among dollar debt indexes compiled by London-based HSBC. ING Groep NV, Erste Sparinvest KAG and HSBC Holdings Plc, which oversee more than $800 billion in assets, are maintaining holdings of Pakistan’s dollar bonds as almost $13 billion in assistance from the International Monetary Fund and aid pledges help the country stave off default. Pakistan’s 6.875 percent dollar bond maturing in June 2017 yielded 18.62 percent yesterday, versus a record high of 26.30 percent on Nov. 3, 2008, according to data compiled by Bloomberg. The Karachi stock index is up 27 percent this year, compared with a 12 percent gain in MSCI’s emerging-market stock index. Pakistan also won promises this month for $5.3 billion in aid from more than 20 countries to help shore up its economy and combat al-Qaeda and Taliban militants.