December 13, 2023 (MLN): Meezan Bank Limited (PSX: MEBL), a pioneer in Islamic banking, served as the lead Joint Financial Advisor in the groundbreaking auction held on December 09 for the sale of 1-year GoP Ijara Sukuk (GIS) for the first time through the Pakistan Stock Exchange Limited (PSX).
This auction through PSX allowed retail investors access to Shariah-compliant government securities in the denomination of Rs5,000/-.
Other Joint Financial Advisors included Dubai Islamic Bank (Pakistan) Limited, Bank Alfalah Limited (PSX: BAFL), and Bank Islami Pakistan Limited (PSX: BIPL).
The auction aimed at raising Rs30bn, surpassed all expectations, and was oversubscribed by more than 13x of the participated realized value, as it received bids worth Rs478.78 billion.
Out of the total bids received, the total amount accepted stood at Rs36.068bn at a cut-off yield of 19.52%.
The tenor of the Sukuk is 364 days, providing investors with a short-term Shariah-compliant investment opportunity.
Going forward, two more auctions are scheduled according to the auction calendar, with the first one set for January 23 and the second for February 20, each with an equivalent target of Rs30bn.
Auction Calendar for GOPIS
| Auction Date | Signing of Subscription Undertaking | Settlement Date | Target Auction Size – Rounded Off (PKR in billion) |
|---|---|---|---|
| 8-Dec-23 | 11-Dec-23 | 11-Dec-23 | 30 |
| 23-Jan-24 | 24-Jan-24 | 24-Jan-24 | 30 |
| 20-Feb-24 | 21-Feb-24 | 21-Feb-24 | 30 |
This milestone issuance not only signifies the robust demand for Shariah-compliant investment but also gives access to retail investors to invest in ethical financial instruments.
The overwhelming success of the auction underscores the confidence of investors in Pakistan's economic stability.
It is worthwhile to mention that through this auction the government was able to raise funds at an almost 2.5% lower financing rate compared to the prevalent Policy Rate which translates into savings of Rs750 million in a single issuance.
The inauguration ceremony at the Pakistan Stock Exchange, attended by the caretaker Prime Minister Anwar ul Haq Kakar and Finance Minister Dr. Shamshad Akhtar, highlighted the government's commitment to promote Islamic finance and inclusivity in the financial markets.
This signifies the commitment of GoP towards the implementation of the Federal Shariat Court’s decision to transition to a Riba-free economy.
Meezan Bank remains at the forefront of Islamic finance, championing financial inclusivity and pioneering innovative solutions.
Copyright Mettis Link News
Posted on: 2023-12-13T13:29:35+05:00
