KARACHI: The proceeds of $1 billion raised through the international sukuk issue, the first under the newly established Trust Certificate Issuance Programme, were received on Tuesday, announced the Ministry of Finance.

During the first 21 days of January, the SBP’s foreign exchange reserves declined by $1.4bn. While in the first seven months of the current fiscal year its forex holdings shrank by $3.88bn.

The ministry in a statement said the participants offered $2.7bn for the bonds but the government successfully raised $1bn sticking to its target.

“The transaction generated great interest as leading global investors from Asia, Middle East, Europe and the United States participated in the order book,” said the ministry.

An earlier announcement said the amount was raised at a high rate of 7.95pc on the international market with a seven-year maturity.

“The 7.95pc is not very high. At this time the rate is appropriate to our economy and global situation,” said Samiullah Tariq, head of research and development at Pak-Kuwait Investment Company. He said in 2017 the then government had raised $1bn through sukuk issue at 5.5pc but that was in accordance with the market conditions.

The ministry said the transactions’ success is a testimony to the investors’ confidence in the country’s economic revival and long-term stability and growth.

“The response was overwhelmingly strong and the orders book were oversubscribed (peaked at $2.7bn) consisting of orders from high-quality investors,” said the ministry, adding that after careful consideration, the government decided to raise $1bn.

It further added that the programme will allow Pakistan to tap the market at short notice. “The government intends to make full use of this program and become a regular issuer of Sukuk in the international capital markets,” said the ministry.

Published in Dawn, February 2nd, 2022