The first primary market auction of the government of Pakistan one-year Ijarah Sukuk at Pakistan Stock Exchange (PSX) has resulted in a resounding success, the exchange said in a statement received on December 12, 2023. This is for the first time in Pakistan’s history that an auction of a Government Debt Security (GDS) took place through the state-of-the-art, fully automated and efficient system of the exchange with settlement and custodial services being provided by the other members of the capital market ecosystem, namely the NCCPL and CDC, it said. “It is a remarkable addition to the product suite offered by PSX,” the statement added.
The auction which took place on December 8, 2023, via the Exchange, heralds a new beginning for raising the GDS. Against the target of the Rs 30 billion Sukuk, bids accepted amounted to Rs 36.1 billion whereas the total bids received amounted to Rs 481.3 billion. As many as 172 investors participated in the bidding process with 132 being the successful number of bidders, resulting in a diversified investor base for the government. The subscription amount totaled Rs 30.12 billion with a cut off rental rate being 19.52 percent and a price of Rs 83.7.
Speaking about the auction, the (Caretaker) Federal Minister for Finance, Revenue & Economic Affairs, Dr Shamshad Akhtar said it was a remarkable achievement which was in the back burner for a long time. “We have now succeeded in implementing the Government Debt Securities issue through the Stock Exchange with the first primary market auction of this GoP Ijarah Sukuk held on December 08, 2023,” she said. She said, this would substantially benefit the government by diversifying the investor base, as well as providing new investment opportunities to investors. The government realized a competitive cut off rental rate of 19.52 percent and the Sukuk was oversubscribed by 16 times. http://tinyurl.com/c2tx4kpt
Source: IBP