In the latest auction of Ijarah Sukuk bonds, held by the Pakistan Stock Exchange (PSX) on December 3rd, the government has raised Rs 353 billion against a target of Rs 500 billion.
A subdued participation was observed, especially in the fixed rental rate (FRR) category, where the three year rental cut-off was put at the 11.5% mark, same as last auction. Similarly, the 5-year and ten year FRR Sukuk’s rental yield was cut-off at 12.1% and 11.7% respectively.
The largest participation was seen in the long term variable rental rate (VRR) Sukuk, the GIS 10-year Sukuk, where the government was able to raise Rs 212 billion, against the targeted Rs 50 billion. The VRR Sukuk is linked to the 6-month weighted average of the Pakistan Market Treasury Bills (MTBs) rate, adjusted by a fixed spread determined during the auction.
