First Rs200bn sukuk issue launched via stock market

Published April 18, 2020
The amount generated from it will be used for the settlement of partial circular debt related to the power sector.  — Dawn/File
The amount generated from it will be used for the settlement of partial circular debt related to the power sector. — Dawn/File

ISLAMABAD: For the first time the government has floated debt of a state-owned entity (SoE) — earlier the exclusive domain of the banks — for ordinary investors through the stock market.

The state-owned Power Holding Ltd (PHL) on Friday announced the 10-year Sharia-compliant sukuk up to Rs200 billion through the Pakistan Stock Exchange.

The amount generated from the Pakistan Energy Sukuk-II (PES-II) will also be used for the settlement of partial circular debt related to the power sector.

For the first time, bonds will be issued through the book-building mechanism. Most importantly, ordinary investors have been allowed to participate in buying a government security. Apart from the banking sector, other eligible investors include mutual funds, voluntary pension schemes and private fund being managed by the NBFC, insurance companies, stock brokers, fund and trust as defined in the Employees Contributory funds, and even individual investors having net assets of at least Rs2 million.

The value of each sukuk unit is placed at Rs5,000. The minimum bid size would be 20 units or Rs100,000.

A senior official of the Ministry of Finance said the move would eventually enhance the role of capital market in the country. The stock brokers have even been allowed to place these bonds issued by the energy ministry as eligible margins, he added.

Meanwhile, in another development, the SECP has relaxed the time for maturity requirement of government Ijara Sukuk for Sharia-complaint money market sub funds of Pension Fund.

The SECP has allowed the Sharia-compliant pension funds to invest in government sukuk from three to five years.

The move has been made considering the challenges faced by the Islamic Pension Funds in terms of liquidity management due to shortage of viable investment avenues available for Sharia compliant pension funds.

Published in Dawn, April 18th, 2020

Opinion

Last call
Updated 23 Sep 2021

Last call

The exchange rate alone can no longer absorb the full impact of the deterioration in the current account.
Appeasing terrorists
Updated 22 Sep 2021

Appeasing terrorists

The policy of appeasement has not worked in the past and it certainly will not work now.

Editorial

Dialogue, at last
Updated 23 Sep 2021

Dialogue, at last

The govt has attempted to make the ECP controversial at a time when its input is critical for the poll reforms
AUKUS controversy
Updated 23 Sep 2021

AUKUS controversy

Instead of flexing its military muscle, the Western bloc needs to engage China at the negotiating table.
Provocative act
Updated 23 Sep 2021

Provocative act

Afghan Taliban flags have been found hoisted at Jamia Hafsa seminary three times since Aug 21.
22 Sep 2021

Interest rate hike

THE State Bank’s decision to raise its key interest rate by 25bps to 7.25pc underpins its acceptance of emerging...
PCB chief’s challenge
Updated 22 Sep 2021

PCB chief’s challenge

The Taliban takeover of Afghanistan has propelled fears of regional insecurity.
22 Sep 2021

No need for secrecy

THE government should not make a mountain out of the Toshakhana molehill. That would only encourage speculation of...