The investment community ranks Pakistan as Indonesia’s twin in Asia; but one whose economic future depends much more on good relations with the US. The US$500M sovereign bond issue was to be floated in Jan 04, in the expectation of over 300 basis points over the US treasury bonds. Here’s an update.
Rarity value versus unfamiliarity. Local investment versus an international benchmark. Improving economic fundamentals versus longer-term security concerns.
These are some of the trade-offs the government of Pakistan will have to weigh as it huddles with lead managers over the coming weeks to discuss its plan to return to the international bond market for the first time in four years.