Govt picks Rs119.7bn through Sukuk auction via PSX

August 15, 2024 (MLN): The Pakistan Stock Exchange (PSX) conducted an auction today for the sale of Government of Pakistan Ijara Sukuk (GIS) bonds, raising Rs119.68bn against the Rs100bn target set for GIS Variable Rental Rate (VRR) and GIS Fixed Rental Rate (FRR) and GIS FRD.

According to the details made available by the local bourse, the bids received stood at Rs444.51bn, out of which Rs176.05bn were received for GIS FRD, Rs136.85bn for GIS VRR and Rs131.61bn for GIS FRR, respectively.

From the aggregate bids received, a sum of Rs34.47bn was accepted for the 1-year GIS FRD, comprising of Rs31.78bn in competitive bids and the remaining Rs2.7bn in non-competitive bids.

The cut-off price for the respective bond stood at Rs86.25, which translates into a rental yield of 15.99%. This is lower than the 17.225% yield recorded in the previous auction.

For the GIS VRR, the government picked a total amount of Rs62.67bn, with Rs28.18bn raised through the 3-year GIS VRR and Rs34.49bn through the sale of 5-year GIS VRR.

Of the total Rs62.67bn, Rs60.69bn was accepted through competitive bids, while the remaining Rs1.99bn comprised non-competitive bids accepted for the respective category of GIS bonds.

The cut-off price was Rs102.17 for GIS 03-Year VRR and Rs102.39 for GIS 05-Year VRR.

Meanwhile, a total amount of Rs22.54bn For the GIS FRR, out of which Rs1.4bn was raised through the 3-year GIS FRR and Rs21.14bn through the successful auction sale of 5-year GIS FRR

The 3-year FRR bond was sold at a cut-off price of 101.75, while the 5-year GIS FRR cut-off price was 102.41.

Compared to the previous auction, it becomes evident that yields have dropped as the cut-off price rose.

Amount in PKR Million

The breakup of the target for today's auction shows that the aim was to raise Rs20bn through the sale of 1-year GIS FRD, and Rs40bn each for GIS VRR and Rs40bn through GIS FRR.

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