T-bills record $232 million inflows in June; equity market hits 10-year high M Haris

Treasury bill inflows have set a new record with a $232 million increase during the first 21 days of June, while net inflows in the equity market have reached a 10-year high, according to the latest data from the State Bank of Pakistan (SBP).

In the last quarter of FY24 (July 2023-June 2024), inflows surged, with June alone bringing in $232 million during the first 21 days. This increase was last seen in 2020 during the peak of the COVID-19 outbreak. 

Total inflows for FY24 stand at $706.4 million, including the $232 million received up to June 21.

Analysts attributed this rise in inflows to high returns on treasury bills and exchange rate stability. They estimated that the three-month treasury bill would offer investors a 6.5% return, equating to an annual return of 20%, the highest in the developing world if the rupee does not depreciate.

The current account deficit has reduced to $464 million during the first 11 months of FY24. Analysts believe that the reduced pressure on the CAD will help maintain exchange rate stability.

The equity market has also seen record inflows, reaching $140 million in FY24, a peak not seen since 2014. The stock market is booming, with the 100-index surpassing the 80,000 mark. Experts predict further inflows if Pakistan secures another IMF deal.

The SBP’s foreign exchange reserves also increased by $494 million to $9.389 billion in the week ending June 28, due to receipts from multilateral agencies. The country’s total reserves rose to $14.573 billion, including $5.183 billion held by commercial banks.