Pakistan raises Rs239.3bn in its first-ever hybrid sukuk auction

On July 22, Pakistan's finance ministry ran its first auction of a short-term hybrid sukuk, a new Shariah-compliant instrument spanning three-month, six-month, one-year, and ten-year tenors. Bids came in at a face value of Rs770 billion against a target of roughly a quarter of that, and the ministry accepted Rs239.3 billion — about a third of realised bids, with Rs162.8 billion in discounted short paper and Rs76.5 billion in a longer variable-rental sukuk. The instrument matters less for its size than its shape: it gives Islamic banks and takaful funds a liquid, tradable short-term asset class they have lacked, narrowing the gap between conventional and Shariah-compliant treasury management. Pakistan's Islamic banking sector has grown fast on deposits but has been constrained by a shortage of eligible short-term assets to hold against them; a standing hybrid sukuk auction calendar addresses that constraint directly rather than through one-off issuances. It is a small piece of financial plumbing, but plumbing is what turns a fast-growing niche into an ordinary, investable market.

This is a QeRN summary by Ahmed Qerni. Read the original at Business Recorder: https://www.brecorder.com/news/40431404/govt-raises-rs2393bn-in-inaugural-hybrid-sukuk-auction.