PSX to auction Rs400bn Islamic Bonds in 1Q2024

January 10, 2024 (MLN): The government is targeting to raise Rs400 billion during the next three months (January-March) of 2024, through the auction of GOP Ijara Sukuk (GIS) that will be conducted by the Pakistan Stock Exchange Limited (PSX).

The government is targeting to raise Rs100bn through the sale of 1-year Islamic Bonds.

Moreover, the government aims to raise Rs150bn through the sale of 3-year and 5-year fixed-rate Islamic bonds.

Meanwhile, the remaining Rs150bn will be sold at a floating rate with a tenure of 3 and 5 years.

The auction calendar released by the local bourse reveals that only one auction will be held during the month of January, and that is scheduled for January 23, 2024.

In this respective auction, the domestic equity market has a target to raise Rs100bn in total. 

According to the breakdown of the total amount, PSX plans to raise Rs40bn through GIS (short term), Rs30bn through GIS (Fixed Rate), and the remaining Rs30bn through the sale of GIS (floating rate).

The second auction is scheduled for February 20, 2024, with a target of raising Rs150bn. Among this total, Rs30bn will be obtained through short-term GIS, while Rs60bn each will be raised through fixed and floating GIS.

Going forward, the third and the last auction according to the auction calendar will be held on March 19, 2024, with a total target of Rs150bn.

Thereby, the government plans to raise this amount by selling Rs30bn worth of short-term GIS, and 60bn each through fixed and floating GIS.

It is important to highlight that the local bourse conducted its inaugural auction for the sale of GIS on December 09, 2023, experiencing an overwhelmingly positive response with bids totaling Rs478.78bn.

Out of the total bids received, the total amount accepted stood at Rs36.068bn at a cut-off yield of 19.52%.

However, despite an impressive response operational challenges hampered brokerage investors.

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