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ISLAMABAD: Pakistan Prime Minister Shehbaz Sharif on Sunday placed water reserves and hydropower at the top of the country&#39;s national development budget, ordering that water storage projects receive first priority for available funds, according to the Prime Minister&#39;s Office. According to a statement from the PMO, PM Sharif chaired a review of Pakistan&#39;s Public Sector Development Program (PSDP), the government&#39;s annual infrastructure and development spending plan. He directed that budget allocations be tied to results, with funding going on a priority basis only to top-performing ministries. The meeting was briefed on progress at three major dam projects: Dasu, Diamer Bhasha, and Mohmand. The railways, IT, and power ministries were singled out for praise. PM Sharif also called for broader use of public-private partnerships in development projects. Finance Minister Muhammad Aurangzeb received recognition for the successful launch of Pakistan&#39;s Panda Bonds (debt instruments sold in China&#39;s capital market) and their reception among investors. The meeting was attended by Deputy Prime Minister and Foreign Minister Ishaq Dar, federal ministers, including Ahsan Iqbal, Shaza Fatima Khawaja, and Hanif Abbasi, as well as senior officials.

People watch the Rawal Dam after the spillway opened due to heavy monsoon rains, in Islamabad on August 31, 2020. (AFP)

Climate & Environment

PM Sharif chairs a review of Pakistan's Public Sector Development Program; briefed on progress at three major dam projects: Dasu, Diamer Bhasha, and Mohmand

Pakistan prioritizes water storage, hydropower in development budget

ISLAMABAD: Pakistan is seeking to establish a sustained presence in China&rsquo;s domestic capital markets after successfully completing its inaugural Panda Bond issuance, Finance Minister Senator Muhammad Aurangzeb said Friday in Beijing. Addressing the inaugural Panda Bond Issuance Ceremony at the Embassy of Pakistan in Beijing, Aurangzeb described the transaction as &quot;far more than the completion of a financial transaction,&quot; saying it marked &quot;the beginning of a new chapter in Pakistan&rsquo;s economic and financial engagement with China in the context of international capital markets.&quot; <div class="fr-embed"><div class="twitter-tweet twitter-tweet-rendered" style="display: flex; max-width: 550px; width: 100%; margin-top: 10px; margin-bottom: 10px;"><iframe id="twitter-widget-1" scrolling="no" frameborder="0" allowfullscreen="true" style="position: static; visibility: visible; width: 550px; height: 696px; display: block; flex-grow: 1;" title="X Post" src="https://platform.twitter.com/embed/Tweet.html?dnt=false&embedId=twitter-widget-1&features=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%3D%3D&frame=false&hideCard=false&hideThread=false&id=2055235741668852144&lang=en&origin=https%3A%2F%2Fmain.d1wrm1qseko1cp.amplifyapp.com%2Farticles%2F&sessionId=9a4935cb81f782164d64a139f9a69f4d32c243db&theme=light&widgetsVersion=6a3ad42b224df%3A1778106238597&width=550px"></iframe></div></div> Pakistan raised 1.75 billion yuan ($250 million) through the three-year fixed-rate bond, its first sovereign yuan-denominated issuance in China&rsquo;s onshore market, which officials said attracted subscriptions exceeding five times the amount offered. &quot;The debut issuance of CNY 1.75 billion experienced an overwhelmingly positive response, was over-subscribed by five times, and closed at a coupon rate of 2.5%,&quot; Aurangzeb said. The finance minister said Pakistan had established a 7.2 billion yuan Panda Bond program following two years of engagement with Chinese regulators, financial institutions, development partners and market participants. &quot;Our goal was clear: to establish Pakistan&rsquo;s long-term presence in the Chinese capital markets and to create a sustainable platform for future sovereign issues,&quot; Aurangzeb said. The issuance marks Pakistan&rsquo;s first entry into China&rsquo;s domestic bond market and forms part of Islamabad&rsquo;s broader strategy to diversify external financing sources beyond conventional dollar-denominated borrowing. &quot;We have previously accessed the Eurobond market, US markets, and Islamic Sukuk markets, but accessing the Chinese capital market, the second largest and second deepest capital market in the world, was long overdue,&quot; the minister said. Aurangzeb said the transaction reflected growing confidence among Chinese institutions and investors in Pakistan&rsquo;s economic reforms and macroeconomic trajectory. &quot;This achievement is far more than the completion of a financial transaction; it reflects trust, partnership, innovation, financial collaboration, and our shared commitment to sustainable development and regional connectivity,&quot; he said. Pakistan became the first South Asian country to issue a Panda Bond, a milestone Aurangzeb linked to the growing maturity of economic cooperation between Islamabad and Beijing as the two countries mark 75 years of diplomatic relations. The minister said proceeds from the issuance would support sustainable development initiatives, including projects in water, social infrastructure and education, describing the transaction as Pakistan&rsquo;s first sustainable green Panda Bond. Speaking on the economy, Aurangzeb said Pakistan was witnessing &ldquo;renewed stability, disciplined reforms, and forward-looking transformation,&rdquo; citing improvements in inflation, foreign exchange reserves, fiscal consolidation and external-sector stability. He also reaffirmed Pakistan&rsquo;s commitment to the International Monetary Fund reform programme, saying adherence to fiscal and structural reforms had strengthened market confidence and macroeconomic foundations. Aurangzeb said the government intended to expand its engagement with Chinese capital markets following the strong response to the debut issuance. &quot;This achievement is only the beginning,&quot; he said. &ldquo;We were always clear that we were not here for just one single trade.&quot; &quot;The overwhelming response, being five times oversubscribed, has guided us to issue the RFP for the next tranches right away,&quot; the minister added.&nbsp; &quot;We want to be regular issuers in the Chinese capital markets.&quot;

Economy

Finance minister says the oversubscribed issuance reflects investor confidence in Pakistan’s economic reforms, with authorities planning future yuan-denominated bond sales to expand financing sources and strengthen long-term access to Asian capital markets.

In Beijing, Pakistan declares Panda Bond ‘beginning of new chapter’

Reuters

Russian companies&#39; plans to tap China&#39;s vast bond market for low-cost funding are proving to be a non-starter, as Chinese banks and investors steer clear due to concerns about Western sanctions, sources said.&nbsp;The conundrum shows the challenges Russian companies face in raising capital, even in a country that has stood by it as an ally after Moscow invaded Ukraine more than three years ago.&nbsp;It is also a test for Beijing, which has forged a so-called &#39;no-limits&#39; partnership with Russia at the same time as it seeks to reach a trade deal with Washington.&nbsp;Top Russian companies, including the state nuclear corporation Rosatom and the giant gas concern Gazprom, are exploring the sale of yuan-denominated &quot;panda&quot; bonds, Reuters reported last month, citing company sources.&nbsp;The news arrived shortly after Russian President Vladimir Putin visited China in early September. Russian companies have been cut off from the West&#39;s capital markets since the Ukraine invasion.&nbsp;Chinese bankers and investors, however, brushed aside the near-term prospect of any panda bond issuance by Russian firms, and a person with direct knowledge of the matter said that regulators and banks were wary of the risks of secondary sanctions.&nbsp;&quot;Preparation has always been underway, but you just cannot push the project forward,&quot; said the person, citing a lack of progress over the past year in the panda bond issuance push by Rosatom and Russian aluminium producer Rusal.&nbsp;Rusal declined to comment. Rosatom, which is not under US sanctions, although its top management has been sanctioned, declined to comment.&nbsp;Gazprom, which cannot raise financing in the US or Europe but has not been subject to US blocking sanctions, known as the SDN List, did not respond to a request for comment.&nbsp;A Chinese securities exchange official said that he was not aware of any concrete issuance plans by Russian companies, and several Chinese onshore bond investors said they would be wary of buying such debt due to the geopolitical risks.&nbsp;All five sources who spoke to Reuters for this story declined to be named due to the sensitivity of the matter.&nbsp;China&#39;s state-owned brokerages, such as Galaxy Securities, have dropped Russia-related deals after 2022, while the &quot;Big Four&quot; state banks are unwilling to underwrite such bonds due to geopolitical concerns, said the first source.&nbsp;Galaxy did not respond to an emailed request for comment.&nbsp;Zhan Kai, a Shanghai-based partner of Yuanda China Law Offices, stated that there is no legal obstacle to Russian companies issuing panda bonds, as long as the issuer is not on the US sanctions list.&nbsp;&quot;But, without doubt, local bankers and traders are worried (about acting) as underwriters or buyers,&quot; said Zhan, who helps Chinese companies avoid sanctions and manage political risks.&nbsp;&quot;At the end of the day, whether a bond can be sold is determined by the market, and I don&#39;t expect a lot of appetite on the ground in China&quot; for Russian issuers, he said.&nbsp;The China Securities Regulatory Commission and the People&#39;s Bank of China did not respond to Reuters requests for comment.&nbsp;Cheaper yuan borrowingIn the first seven months of this year, 35 offshore firms raised 116 billion yuan ($16.3 billion) via panda bonds, after the volume hit 194.8 billion last year, the highest level since such data started becoming available in 2015, according to an S&amp;P Global report.&nbsp;No Russian companies, however, have issued debt in China&#39;s 342-billion-yuan panda bond market since the 2022 Ukraine conflict. Even before Russia sent troops to Ukraine, only one Russian firm, Rusal, sold panda bonds in China in 2017.&nbsp;Hopes for issuances by Russian firms were triggered by the Chinese ratings agency CSCI Pengyuan assigning a &quot;triple-A&quot; rating to Gazprom in early September, indicating a very low risk of default and paving the way for its yuan bond issuance.&nbsp;Russian rouble borrowing rates are quite high &mdash; around 15%-16% a year &mdash; so issuing yuan bonds &quot;is a chance to get cheap capital&quot;, said a Moscow-based fund manager who declined to be named.&nbsp;By comparison, a Chinese unit of BMW BMWG.DE sold a panda bond in July with a coupon rate of 1.73%.&nbsp;A Russian government official said that nothing is stopping Russian companies from issuing panda bonds as long as there is demand.&nbsp;&quot;Large companies work with their placements themselves. We only help them in terms of infrastructure and some solutions,&quot; said the official, adding that the only question now is who will buy them in China, where banks are afraid of secondary sanctions.&nbsp;Some Russian firms are so desperate for low-cost funding that they are looking to restructure loans with a commodities trade deal, said a manager of a Chinese state-owned company who declined to be identified.&nbsp;Kirill Lysenko, an analyst at Russian rating agency Expert RA, said the process of issuing panda bonds by Russian firms could take years.&nbsp;&quot;Even within a &#39;friendly country&#39; framework, geopolitical risks persist. Should sanctions impact Chinese financial infrastructure, complications in debt servicing could emerge,&quot; he said.&nbsp;($1 = 7.1197 Chinese yuan renminbi)

Business

Geopolitical risks deter Chinese investors from buying Russian bonds, while no Russian firms have issued panda bonds since Ukraine conflict.

Articles tagged with "Panda bond"

Pakistan prioritizes water storage, hydropower in development budget

In Beijing, Pakistan declares Panda Bond ‘beginning of new chapter’

Sanctions fears stymie Russian companies' panda bond sales push in China