In Pakistan, we are fortunate in that our economy is endowed with a variety of both conventional and Islamic financial services and products.

While the conventional financial services cater to a wide array of investors, bank depositors, loan recipients, and financiers since the inception of the State of Pakistan, the Islamic financial services have over the years gained immense traction and momentum, particularly since the foundation of Islamic finance was laid in the country in late 1970s and the 80s.

Islamic finance has gained immense popularity because, as a nation, we are significantly inclined towards our religious values which have multiple influences over various aspects of our lives.

Keeping our Islamic values in perspective, the Government of Pakistan (GoP) introduced the GoP Ijarah Sukuk (GIS) as an asset class to raise capital while presenting an option to investors to invest Islamically and ethically.

GIS is a Shariah-compliant investment option and is a variant in that respect to the other Government Debt Securities (GDS) available such as Market Treasury Bills (MTBs or T-Bills) and Pakistan Investment Bonds (PIBs). Needless to say, MTBs and PIBs are conventional GDS.

In a major development in the financial landscape of Pakistan, in December 2023, the Primary Market auction of GoP Ijarah Sukuk started to take place on the stock exchange platform. This was the first time in the history of Pakistan’s capital market, that the GoP Ijarah Sukuk was auctioned through the state-of-the-art auction system made in-house by the Pakistan Stock Exchange (PSX).

Previously, this fell within the ambit of the State Bank of Pakistan. The auction for GIS through PSX allows for greater transparency, access to a larger number of participating........

© Business Recorder