Short-Term Hybrid Sukuk: Govt raises over Rs239bn through capital market

KARACHI: The Ministry of Finance (MoF), in collaboration with the State Bank of Pakistan (SBP), the Securities and Exchange Commission of Pakistan (SECP) and Pakistan Stock Exchange (PSX), has successfully completed the inaugural issuance of the Government of Pakistan’s Short-Term Hybrid Sukuk, raising Rs239.325 billion through the capital market.

According to a statement issued, the issuance marks the launch of 3-month and 6-month Shariah-compliant sovereign instruments, expanding the range of tenors available under the Government of Pakistan Sukuk programme and providing investors with additional short-term Islamic investment options.

The issuance was arranged with the support of Joint Financial Advisors comprising BankIslami Pakistan Limited (BIPL), Dubai Islamic Bank Pakistan (DIB), Bank Alfalah Limited (BAFL), led by Meezan Bank Limited (MEBL), along with the Capital Market Infrastructure Institutions (CMIIs), including PSX, the National Clearing Company of Pakistan Limited (NCCPL) and the Central Depository Company of Pakistan Limited (CDC).

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The Ministry of Finance said the introduction of short-term Sukuk instruments is aimed at broadening investment avenues, supporting liquidity management across the Islamic financial system and further deepening Pakistan’s domestic Shariah-compliant debt market.

The issuance also introduced a revised allocation methodology based on a non-uniform pricing mechanism. Under the new framework, competitive bidders are allocated securities at their accepted bid rates, while non-competitive bidders receive allocations at the weighted average price or yield.

The methodology will apply to all Government of Pakistan Sukuk issued through PSX, including Fixed Rate Discounted (FRD), Fixed Rental Rate (FRR), Variable Rental Rate (VRR) and Fixed Rate Zero Coupon (FRZ) Sukuk.

According to the auction results, bids worth Rs770.234 billion in face value, equivalent to a realised value of Rs741.287 billion, were received, reflecting strong investor participation. The government accepted around 32 percent of the total realised value of bids.

Of the total amount raised, Rs162.796 billion was mobilised through the 3-month, 6-month and one-year discounted Sukuk, while the 10-year Variable Rental Rate (VRR) Sukuk accounted for Rs76.529 billion.

The cut-off yield for the three-month discounted Sukuk was set at 11.4994 percent, while the weighted average yield stood at 11.4413 percent.

The six-month discounted Sukuk carried a cut-off yield of 11.6902 percent and a weighted average yield of 11.5685 percent.

For the one-year discounted Sukuk, the cut-off yield was 11.84 percent, with a weighted average yield of 11.7526 percent.

The 10-year VRR Sukuk was issued at a cut-off yield of 11.5803 percent and a weighted average yield of 11.5580 percent. The reference coupon rate for the 10-year VRR Sukuk was set at 11.3904 percent.

PSX said the successful issuance represents an important milestone in the development of Pakistan’s Islamic capital market and reaffirmed its commitment to promoting Shariah-compliant investment products and strengthening the country’s Islamic financial ecosystem.

Copyright Business Recorder, 2026