The Pakistan Stock Exchange has formally announced a significant primary market auction for Government of Pakistan Hybrid Sukuk and GoP Ijarah Sukuk, set to take place on Monday, May 18, 2026. This move follows a series of regulatory notices issued earlier in the week, confirming the exchange’s role in facilitating Shariah-compliant government borrowing. The auction will utilize the specialized PSX Auction System, providing a transparent and efficient platform for a wide range of investors to participate in the national debt market. This initiative is part of a broader strategy to diversify the government’s funding sources while offering high-quality investment avenues to the public and institutional sectors.
This upcoming session is particularly noteworthy as it marks the 5th auction for the GoP Hybrid Sukuk, featuring fresh issues of 3-year and 5-year Fixed Rental Rate instruments. Simultaneously, the exchange will conduct the 34th GoP Ijarah Sukuk auction, which involves the 4th re-opening of a 10-year Fixed Rate Zero Coupon instrument. Each of these three distinct instruments has been assigned an individual target size of 50 billion rupees, bringing the cumulative auction target to a substantial 150 billion rupees. By offering a mix of tenors and structures, the government aims to cater to varying investor appetites for duration and risk.
The Hybrid Sukuk is built upon a sophisticated dual-transaction Shariah model that integrates an Ijarah Sale and Lease Back component with a Commodity Murabaha transaction. In this specific structure, 55 percent of the total proceeds are allocated to the Ijarah segment, while the remaining 45 percent are utilized for the Commodity Murabaha portion. Investors in the Hybrid Sukuk can expect semi-annual profit payments derived from the combined returns of these underlying transactions. In contrast, the 10-year Ijarah Sukuk functions as a zero-coupon instrument issued at a discount, where the total rental income is realized as the difference between the face value and the initial investment value at the time of maturity.
Participation in this landmark auction is highly inclusive, opening doors for individuals, corporate entities, trusts, and financial institutions such as banks and insurance companies. Even non-resident Pakistanis and foreign investors, including Roshan Digital Account holders, are eligible to bid. For those without an existing Central Depository Company sub-account, the CDC is offering a Facilitation Account service to ensure seamless participation. The bidding window is scheduled to remain open from 10:00 a.m. to 12:00 p.m. on the day of the auction, with the final financial settlement and transfer of funds occurring on the following day, Tuesday, May 19, 2026.
These instruments are issued by the Pakistan Domestic Sukuk Company Limited, a wholly owned subsidiary of the Ministry of Finance, with major Islamic banks including Meezan Bank, Dubai Islamic Bank, Bank Islami, and Bank Alfalah serving as joint financial and Shariah advisors. Once the issuance is complete, the sukuk units will be maintained in book-entry form and will be freely tradable on the Pakistan Stock Exchange. Furthermore, they are designated as 100 percent Statutory Liquidity Ratio eligible instruments, making them an attractive option for banking institutions looking to meet regulatory requirements while earning competitive returns. This auction represents a vital step in strengthening Pakistan’s capital market and expanding the reach of Islamic finance nationwide.
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