The Presidents/ Chief Executives
Primary Dealers
Dear Sirs/ Madam,
Day Count Convention of Pakistan Investment Bonds
Please refer to SBP-BSC Circular No SEC.DIV./U-1/PIB/Intt./733/2004 on subject of Calculation of Profit on Investment made in Pakistan Investment Bonds and various other instructions issued from time to time for management of Pakistan Investment Bonds. In line with the international best practices, it has been decided to apply Actual/Actual day count for computing profit on investment in Pakistan Investment Bonds; as per the following formula
AI |
= |
Face Value x |
Coupon Rate
2 |
x Day Count Factor |
where, |
|
|
|
|
Day count factor |
= |
|
(D2 - D1)
(Days in the Coupon Period) |
|
D1 |
= |
|
Start of Coupon Date |
|
D2 |
= |
|
Bond Settlement Date & |
|
Days in the Coupon Period |
= |
|
Actual Number of Days in Coupon Period |
|
The above mentioned formula will be effective from 4th January, 2016 and will be applicable on all the issues of Pakistan Investment Bond.