Govt showcases record Sukuk issuance, debt market growth

July 11, 2026 (MLN): Pakistan Stock Exchange (PSX), in collaboration with the Ministry of Finance (MoF), held an investor briefing at the Dr. Shamshad Akhtar Auditorium, bringing together officials, financial institutions, asset managers, brokers and other market participants to discuss Pakistan's debt management strategy, Sukuk issuance, secondary market development and fiscal reforms.

Speaking at the event, PSX Managing Director and CEO Farrukh H. Sabzwari highlighted the exchange's role in government debt issuance, noting that the government's Sukuk issuance reached Rs3.5tr in FY2026, compared with Rs2.2tr in FY2025.

He added that total issuance through the capital market has climbed to Rs6.4tr, according to the press release.

Sabzwari also noted that the average daily traded volume increased to Rs3.9bn from Rs2bn a year earlier.

Secondary market participation also expanded, with 11 banks and three asset management companies receiving direct market access, while 51 Bills & Bonds-enabled brokers are now offering trading in government Sukuk.

Advisor to the Finance Minister Khurram Schehzad outlined the government's fiscal strategy, stating that it is centered on relief, growth and fiscal responsibility.

He noted that exporters are receiving refinance facilities at 4.5%, while small and medium enterprises have benefited from reductions in super tax.

He further stated that Pakistan's debt-to-GDP ratio has declined from 75.2% in 2023 to 68.5%, while Rs4.7tr of expensive debt has been retired over the past two years, including Rs2.2tr during the current year.

According to Khurram Schehzad, debt growth has slowed to 5%, compared with a historical average of 12%, while the share of revenue allocated to debt servicing has fallen from 61% to 40%.

Khurram Schehzad also said privatization efforts are progressing, with three power distribution companies expected to be launched by year-end, alongside planned transactions in the energy, airport and banking sectors.

Advisor on Debt to the Finance Minister Omer Khan said Pakistan's debt strategy is focused on sustainability, with the Average Time to Maturity (ATM) improving from 2.6 years three years ago to 3.9 years.

He stated that Roshan Digital Account inflows have increased by $300m per month, while Pakistan has returned to international capital markets through Eurobond and Panda bond issuances.

He also declared the launch of sovereign debt tokenization and noted that Liability Management Operations reached Rs2.923tr in FY2026, including Rs1.927tr through State Bank of Pakistan instruments. External debt repayments totaled $1.8bn, he added.

Director Domestic Debt Khaliq Uz Zaman emphasized that engagement with investors has helped shape new debt instruments and improve market participation.

He said gross Sukuk issuance reached Rs3tr in FY2026, supported by a hybrid structure and retail participation through JazzCash, InvestPak, CDNS and Roshan Digital Accounts.

ATM increased to 3.9 years, Average Time to Refixing improved to 1.3 years, while the Weighted Average Cost of borrowing remained at 11.2%, below the policy rate.

Zaman added that the yield curve reflected a spread of 19 basis points between three-month and five-year borrowing, enabling medium-term funding at rates close to short-term financing.

He further stated that trading activity in the secondary market remained strong, with conventional securities volumes increasing 25% year-on-year to Rs159,373, while Sukuk trading through PSX surged 275% to Rs973.

Looking ahead, he said Pakistan plans to introduce its first short-term sovereign Sukuk programme, targeting Rs400-500bn through three-month and six-month tenors to complete the sovereign Sukuk curve, broaden the investor base and support the domestic savings economy.

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