The government through the Ministry of Finance raised Rs. 87.79 billion against an initial target of Rs. 100 billion for only the second-ever auction of a sovereign Sukuk at the Pakistan Stock Exchange (PSX) on January 23, 2023.
The government smartly borrowed slightly less amounts to maintain yields in the latest auction of Pakistan Ijara Sukuk (GIS) at the main bourse, noted CEO Topline Securities Mohammed Sohail in a tweet earlier today.
For Rs. 100 billion, investors offered an amount of close to Rs. 560 billion. Many offers were at higher yields amid expectations of delay in a rate cut. However, the government picked Rs. 85.1 billion in competitive and Rs. 2 billion in non-competitive bids and kept the rates near the last auction.
The 1-year Sukuk cut-off yield came in at 19.49 percent from 19.51 percent in the last auction. Similarly, the 3-year Sukuk fix cut-off was 16.05 percent while 15.49 percent for the 5-year maturity.
The full break-up of the auction summary is as follows:
| Competitive (in Rs. Million) | Non-Competitive (in Rs. Million) | Total (in Rs. Million) | |
|---|---|---|---|
| 1-Year Discounted IJARAH Sukuk | 5,672.36 | 746.635 | 6,419 |
| GIS 03-Year FRR | 20 | 301.355 | 321.36 |
| GIS 05-Year FRR | 22,255 | 314.16 | 22,569.16 |
| GIS 03-Year VRR | 14,702 | 226.115 | 14,928.12 |
| GIS 05-Year VRR | 42,523.50 | 428.66 | 42,952.16 |
| Net Total | 85,172.86 | 2,016.93 | 87,189.79 |
In December 2023, the government received an overwhelming response at PSX for the successful auction of the 1-year GIS of Rs. 30 billion in December 2023. This issue was oversubscribed by more than 12 times.
