KARACHI: Investors displayed confidence on Pakistani bonds in world markets, as the insurance premium rate on five-year bonds edged down 26 percent to 6.5 percent, Geo News reported Thursday.
According to Credit Market Analysis (CMA), which organises and structures CDS (credit default swaps), bond quotes and valuation data, if the government of Pakistan sells five-year Euro bond on world level, it would have 6.5 percent insurance risk premium.
The insurance risk premium rate on Pakistani bonds was 8.9 percent on February 2, 2010, which perched on 6.5 percent on April 14, 2010.
According to experts, the balance of payments improved as the trade deficit shrank and foreign exchange reserves bulge; this has led to reduction in insurance risk premium on five-year bonds.
According the experts, the insurance risk premium can jump up in view of foreign investment, delay in expected aid and political instability.