The inaugural one-year Ijarah Sukuk auction by the Government of Pakistan at the Pakistan Stock Exchange (PSX) has marked a resounding success, as declared in an official statement received on Tuesday. This historic event signifies the first-ever auction of a Government Debt Security (GDS) through the state-of-the-art and fully automated system of the exchange, with settlement and custodial services provided by key members of the capital market ecosystem, namely the NCCPL and CDC.
Taking place on December 8, 2023, the auction signals a groundbreaking moment for GDS issuance in Pakistan. Against the targeted Rs 30 billion Sukuk, accepted bids totaled Rs 36.068 billion, while total bids received amounted to an impressive Rs 481.307 billion. A diverse investor base emerged with 172 participants in the bidding process, resulting in 132 successful bidders.
The subscription amount reached Rs 30.191 billion, featuring a cut-off rental rate of 19.5199% and a price of Rs 83.7055. Speaking on this achievement, the (Caretaker) Federal Minister for Finance, Revenue & Economic Affairs, Dr. Shamshad Akhtar, lauded the accomplishment, highlighting its long-awaited realization. She emphasized the significance of implementing Government Debt Securities through the Stock Exchange, providing benefits such as a diversified investor base and new opportunities.
Chairman SECP, Akif Saeed, underscored the importance of government securities in capital market development, viewing the launch of GDS at PSX as just the beginning. He called on PSX, brokers, insurance companies, and asset managers to focus efforts on marketing to attract new investors.
Reflecting on the auction, MD & CEO PSX, Farrukh H. Khan, hailed it as a landmark achievement. The overwhelming success of the primary market auction, with 172 participating investors, showcased a highly successful venture. The government achieved a competitive cut-off rental rate of 19.5199%, and the Sukuk witnessed a remarkable oversubscription of 16 times.