Pakistan raises PKR 239 billion in inaugural Hybrid Sukuk auction

Pakistan raised PKR 239.325 billion through its Short-Term Government of Pakistan Hybrid Sukuk auction on Wednesday. The Pakistan Stock Exchange conducted the sale on behalf of the Ministry of Finance.

Strong bidding from institutional investors pointed to rising demand for Shariah-compliant sovereign debt in the country.

How much did Pakistan raise in the Hybrid Sukuk auction?

Investors submitted bids worth PKR 770.234 billion in face value, equivalent to a realised value of PKR 741.287 billion. The government accepted PKR 239.325 billion of these bids.

The strong response reflected improving liquidity conditions and steady institutional appetite for sovereign Sukuk instruments offering mixed fixed and floating returns.

What is a Hybrid Sukuk?

A Hybrid Sukuk combines fixed and floating rate structures within a single Shariah-compliant instrument. This design broadens the government's Islamic funding base while giving investors flexibility across different risk and return preferences.

The structure allows institutions to choose exposure that matches their own risk appetite.

What were the cut-off yields in the auction?

The cut-off yield for the three-month discounted Sukuk was set at 11.4994%. The six-month paper cleared at 11.6902%, while the one-year discounted Sukuk was priced at 11.8400%, a rise of 54 basis points above the previous benchmark.

The 10-year Variable Rental Rate Sukuk cleared at 11.5803%, a spread of 18.99 basis points over its reference coupon rate of 11.3904%.

Why does this auction matter for Pakistan's Islamic capital market?

The strong demand for the debut issuance signals continued investor confidence in sovereign-backed Islamic securities. It supports ongoing efforts by the Ministry of Finance,

the State Bank of Pakistan and the Securities and Exchange Commission of Pakistan to deepen the domestic Sukuk market. Market participants said improving liquidity conditions helped drive the strong institutional response.