Pakistan sells Ijarah Sukuk worth PKR 92 billion

Pakistan government has raised PKR 92 billion ($327.4 million) in an Ijarah Sukuk auction against a target of PKR 90 billion.

The auction received bids totaling PKR 208 billion.

The one-year yield increased to 11% from 10.25% in the last auction on February 4 and.

Yields on three-year fixed-rate sukuk remained steady at 11.5%, while five-year fixed-rate sukuk yields also remained unchanged at 11.99%.

In 2024, the government raised PKR 2 trillion from Sukuk auctions through the PSX auction system across 15 auctions. The largest amount was raised in the final auction of 2024 on December 3, fetching PKR 353 billion, with 60% of the funds raised in 10-year Sukuk.

In October 2023, the caretaker federal cabinet approved amendments to the Government of Pakistan Market Treasury Bills 1998 and Government of Pakistan Ijara Sukuk Rules 2008.

These amendments aimed to enhance efficiency and provide flexibility for the issuance, registration, trading, and transfer of government securities through any institution.

The changes were also intended to expand the government's investor base, make participation easier for diversified investors, including retail investors, and ultimately reduce the cost of borrowing by increasing the subscriber base.