Govt raises hybrid sukuk reopening target to Rs200bn

ISLAMABAD: The government has increased the target size for the reopening of its 10-year variable rental rate GoP hybrid sukuk to Rs200 billion from Rs50 billion, according to a Pakistan Stock Exchange notice issued after advice from the Debt Management Office.

The revised target applies to the reopening auction scheduled for June 10, 2026. The PSX said the target size in the term sheet and Annexure B had been amended, while all other details of the auction remained unchanged. The maximum limit per investor for non-competitive bids had been updated in the PSX auction system.

The 10-year variable rental rate sukuk was first issued on April 16, 2026 and will mature on April 16, 2036. It is being reopened through the PSX under a hybrid Shariah-compliant structure that combines Ijarah sale-and-lease-back and Commodity Murabaha transactions. According to the term sheet, 55% of the proceeds will go to the Ijarah component and 45% to the Commodity Murabaha portion.

The floating return benchmark is linked to either the weighted average yield on six-month Treasury bills or the six-month PKRV rate. The applicable benchmark for the first period has been listed at 11.3685%, while the bid spread for the 10-year listed variable rental rate sukuk has been set at +35 basis points. Profit on the instrument is paid every six months and reset at the beginning of each six-month rental period.

Revised auction calendar issued

Separately, the PSX released a revised auction calendar for GoP Hybrid Sukuk and GoP Ijarah Sukuk for June to August 2026. Under the schedule, the cumulative target for discounted and variable-rate hybrid sukuk issuances has been set at Rs1.6 trillion across six auctions. Fixed-rate hybrid sukuk and fixed-rate zero-coupon ijarah sukuk auctions have a combined target of Rs450 billion across three auctions.

The calendar shows two variable rental rate auctions in June, on June 10 and June 23, with target sizes of Rs350 billion each. Two such auctions are scheduled in July with targets of Rs250 billion each, while two more are planned for August with targets of Rs200 billion each. Fixed-rate hybrid sukuk and ijarah sukuk auctions are scheduled for June 17, July 2 and August 4, with each auction carrying a target of Rs150 billion.

Market participants said the larger reopening target reflected a stronger government preference for raising longer-tenor Shariah-compliant domestic financing as the authorities continue efforts to diversify funding sources and expand the listed sovereign sukuk market.

The sukuk is listed and tradable on the PSX and carries 100% SLR eligibility for eligible investors. It is open to individuals, institutions, Roshan Digital Account customers, non-resident Pakistanis and foreign investors under the amended Government of Pakistan Sukuk Rules.

Rupee and bullion market moves

Meanwhile, the Pakistani rupee posted a marginal gain against the US dollar in the inter-bank market on Tuesday. By the close of trading, the local currency stood at Rs278.37 per dollar, improving by three paisa from Monday's closing level of Rs278.40.

In international markets, the dollar remained near a two-month high amid heightened geopolitical uncertainty in the Middle East and increasing expectations that the US Federal Reserve could raise rates later this year. Although Israel and Iran had paused direct attacks after an appeal from US President Donald Trump, investor caution remained in place as Tehran warned it could resume strikes if Israel continued targeting Hezbollah positions in Lebanon.

Gold prices in Pakistan also moved up in line with gains in global bullion markets. In the local market, the price of gold rose by Rs2,830 per tola to Rs455,063, while the rate for 10 grams increased by Rs2,547 to Rs389,534, according to figures issued by the All-Pakistan Gems and Jewellers Sarafa Association.

A day earlier, gold had fallen by Rs3,094 per tola to close at Rs452,233. In the international market, gold gained $28 to reach $4,326 per ounce, including a premium of $20. Silver also rose in the domestic market, with the per-tola price increasing by Rs141 to Rs7,314.