Pakistan Dollar Bonds are the Best Performers in Asia, Rally Is Not Stopping

Rating upgrades and plans to re-enter global debt markets bolster sentiment, according to Goldman Sachs Asset Management and UBS Asset, here's what global investors say about Pakistan.

Per investors, Pakistan’s dollar bonds will likely extend their rally as credit-rating upgrades and the government’s plans to re-enter global debt markets bolster sentiment.

The nation plans to sell yuan-denominated bonds later this year and return to the Eurobond market in 2026 for the first time in nearly five years, marking a pivotal moment for a country that came close to a default two years ago.

Danske Bank Asset Management, which bought Pakistan’s dollar bonds at the height of its financial crisis two years ago, has added to its holdings several times this year.

“We are optimistic that Pakistan will stay on the reform course. They’re sticking to the IMF policies, which we believe they have a strong commitment to do so,” said Shamaila Khan at UBS Asset Management.

Market access means “you really are not concerned about refinancing over the next 2-3 years”.

Per Bloomberg, Pakistan’s dollar-denominated bonds have outperformed every Asian market, delivering a 24.5% return.

The strong performance comes after prolonged default concerns, signalling a significant rebound in investor interest.

Officials believe that granting market access will help reduce future refinancing risks, a concern that has hovered over the economy since 2022.