The Pakistan Stock Exchange (PSX) will conduct an auction for GoP Ijarah Sukuk (GIS) instruments on January 23, 2024. The targeted amount for the auction is PkR 100bn. The instruments include one-year discounted, 3-5 year fixed rental rates (FRR), and 3-5 year variable rental rates (VRR).
Instrument Structure
One-year GIS discounted: The one-year discounted security would act as a zero-coupon bond, with yields determined by the variance between the bid discount and the instrument’s face value.
3-5-year GIS-FRR: The GIS-FRR would have a fixed rental rate payable every six months. The Ijarah rental would be based on the cut-off rate.
3-5-year GIS-VRR: The GIS-VRR would have a variable rental rate payable every six months. Its Ijarah rental would be based on the benchmark rate (weighted average yield of the six-month T-Bill in the previous auction) and the cut-off spread.
Courtesy – BMA Capital Management Ltd.