KARACHI, March 29: The State Bank of Pakistan set a cut-off yield at 11.4494 per cent on the government’s benchmark 10-year investment bond at an auction on Saturday.

The yield was higher than the cut-off yield of 10.8503pc set at the previous auction on Jan 29.

The SBP also set a cut-off yield of 11.9893pc on the 15-year Pakistan Investment Bond (PIB), up from 11.7452pc in previous auction. For the five- and three-year bonds, the cut-off yield was set at 10.7995 and 10.6044 per cent, respectively.

In the last auction, the cut-off yields on the five and three-year PIB’s were set at 10.2486 and 10.0499 per cent, respectively.

The central bank also set cut-off yields at 12.1296 per cent and 12.4938 per cent for the 20- and 30-year PIBs, compared with 11.9493 and 12.1105 per cent set in the last auction.

“Cut-off yields were increased and this was according to market expectations,” said a brokerage dealer.

The central bank said it sold a total of Rs4.51 billion worth of PIBs, after receiving bids worth of Rs11.66 billion. It had set a combined pre-auction target of Rs20 billion.

The 3-, 5-, 10-, 15-, and 20-year PIBs carry annual coupons of 9.1, 9.3, 9.6, 10, and 10.5 per cent respectively, while the 30-year paper carries a coupon of 11 per cent.It was the sixth PIB auction by the government in 2007-08.

—Reuters