It is an investment that provides a return in the form of fixed periodic payments and the eventual return of principal at maturity. The payments of a fixed income security are known in advance e.g. a PKR 100,000, 3 –year coupon bond with 10% annual return will pay PKR 10,000 every year and then at the end of 3 years PKR 100,000 is matured.
Fixed income products offer lower returns when compared to stocks as they guarantee income.
In Pakistan there are multiple fixed income products for both conventional and Shariah compliant investors. You can invest in the following fixed income products through Abbasi Securities:
It is a fixed income debt instrument issued by a corporation to raise money for future projects. These instruments are relatively riskier than government securities and hence the returns are higher.
Corporations like Engro and Banks like Bank AL Falah issue such bonds with attractive fixed returns.
It essentially entails lending money to other investors for purchase of shares. Lending is for a maximum period of 60 days and maturity is staggered such that 25% of the financed amount matures every 15 days.
Margin Financing returns exceed all other fixed income instruments. Abbasi Securities is one of the top 15 firms in Pakistan to offer this product.
These include T-Bills i.e. a short –term investment product with maturity of less than one year and Pakistan Investment Bonds (PIBs) i.e. a long-term investment product with maturity of 3 years and more. Both these instruments are offered by the Government of Pakistan. Due to low default risk these instruments offer lower returns.
To know which fixed income product is good for you feel free to contact one of our advisors at 0213-5845767
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