KARACHI, May 9: Auction of Pakistan Investment Bonds (PIBs) on Wednesday showed investment trend in government papers as most of the amount was invested in short-term PIBs while no investment was made for a longer period, like 20 years.

Market experts said concentration of investment for short-term period reflects uncertainty looming over the policy interest rate. The details of the auction showed the highest amount of Rs11.599 billion was invested in three years PIBs.

The total amount invested in PIBs was Rs24.824 billion.

The government had ann-ounced the last quarter target of PIBs worth Rs40 billion, including long-term PIBs like 20 years but the long-term investment seems to have lost attraction.

The government had set Rs5 billion investment target for PIBs during the quarter from April to June.

The coupon rates on three and 20 years are 11.25 per cent and 13 per cent respectively, an attractive margin for long-term investment.

The latest auction attracted Rs9.244 billion for PIBs of 10 years tenure while the five years received an amount of Rs3.981 billion.

The government has been borrowing from all available resources of private sector, particularly from banks.

The banking industry’s prime income depends on investment into government securities while Islamic Banks also depend largely on investment in Sukuk, Islamic Bonds.