Underwhelming response: Aurangzeb for promoting Sukuk among foreign investors
ISLAMABAD: Finance Minister Muhammad Aurangzeb on Thursday called for promoting Pakistan’s sovereign Sukuk among international investors, noting that foreign investment in the Shariah-compliant instruments remained underwhelming despite positive inflows into Treasury Bills (T-bills) and Pakistan Investment Bonds (PIBs).
He stated this while addressing a ceremony marking the achievement of Rs10 trillion in sovereign Sukuk issuance.
He said that Pakistan’s sovereign Sukuk issuance has surged 113 percent year-on-year in 2026, with the government introducing hybrid and short-term Shariah-compliant instruments to diversify its financing sources and deepen the Islamic capital market.
Pakistan’s Sukuk issuance surged 113 percent year-on-year to Rs4.4 trillion in 2026, said the minister, adding that issuance had increased from approximately Rs2 trillion a year ago, while the five-year compound annual growth rate (CAGR) stood at around 22 percent, compared with nearly Rs761 billion in 2020.
Aurangzeb said the milestone was not merely about the volume of issuance but also reflected sustained efforts to diversify the Sukuk market and introduce greater flexibility in government financing instruments.
He highlighted the introduction of hybrid government Sukuk, combining different Shariah-compliant structures, saying these instruments would provide greater flexibility in the utilisation of government-owned assets.
The introduction of short-term Sukuk, with maturities ranging from three to six months, was another significant development, as it addressed a longstanding gap in the market and helped establish a comprehensive Shariah-compliant yield curve across different maturities.
However, the minister noted that foreign investment in Sukuk remained below expectations, despite positive foreign inflows through Special Convertible Rupee Accounts (SCRAs) into Treasury Bills and Pakistan Investment Bonds (PIBs).
He urged banks, primary dealers, brokers and other market participants to actively promote sovereign Sukuk among international investors and diversify foreign portfolio investment towards Shariah-compliant instruments.
The minister also called for expanding retail participation through digital platforms, saying investment opportunities should not remain confined to institutional and large-scale investors.
He said digital channels could enable individuals to invest in Sukuk with amounts as low as Rs5,000, making Islamic financial instruments accessible to ordinary citizens and broadening the investor base.
On the development of the corporate debt market, Aurangzeb said the government was also pursuing the promotion of listed Sukuk.
He disclosed that the Ministry of Power had issued the first mandate to National Debt Company, which was working on launching its first-ever listed Sukuk.
He expressed hope that the successful issuance would establish a benchmark for other corporate entities to tap the market.
The minister emphasised the need for coordinated efforts by the Securities and Exchange Commission of Pakistan (SECP), State Bank of Pakistan (SBP), Pakistan Stock Exchange (PSX) and Central Depository Company (CDC) to develop a comprehensive ecosystem for Sukuk issuance and trading.
Reaffirming the government’s commitment to developing a deep, diversified and liquid Islamic capital market, he stressed active cooperation among the government, regulators, financial institutions and the private sector.
Aurangzeb also underscored the importance of learning, reflection, mutual understanding and cooperation in strengthening Islamic finance.
Referring to Quranic teachings, he highlighted the importance of informed reasoning, respectful debate and Ijtihad in addressing emerging economic and financial challenges.
He said financial experts and religious scholars needed to engage in constructive discussions and apply established principles of the Quran and Sunnah thoughtfully to evolving financial requirements.
The minister urged stakeholders to focus on common ground rather than differences, expressing confidence that collective efforts would further strengthen Pakistan’s Islamic capital market.
Copyright Business Recorder, 2026