Government Highlights Record Sukuk Issuance and Debt Market Expansion

July 11, 2026 (MLN): Pakistan Stock Exchange (PSX), together with the Ministry of Finance (MoF), organized an investor briefing at the Dr. Shamshad Akhtar Auditorium, gathering officials, financial institutions, asset managers, brokers and other market participants to discuss Pakistan’s debt management strategy, Sukuk issuance, secondary‑market development and fiscal reforms.

Speaking at the event, PSX Managing Director and CEO Farrukh H. Sabzwari highlighted the exchange’s role in government debt issuance, noting that Sukuk issuance reached Rs3.5 trillion in FY2026, up from Rs2.2 trillion in FY2025.

He added that total capital‑market issuance rose to Rs6.4 trillion, according to the press release.

Sabzwari noted that average daily trading volume rose to Rs3.9 billion, up from Rs2 billion a year earlier.

Secondary‑market participation expanded, with 11 banks and three asset‑management firms gaining direct market access, and 51 Bills & Bonds‑enabled brokers now offering trading in government Sukuk.

Finance Minister’s advisor Khurram Schehzad outlined the government’s fiscal strategy, emphasizing relief, growth and fiscal responsibility.

He noted that exporters are receiving refinance facilities at 4.5%, and small‑ and medium‑sized enterprises have benefited from reduced super‑tax rates.

He further stated that Pakistan’s debt‑to‑GDP ratio fell from 75.2% in 2023 to 68.5%, and Rs4.7 trillion of high‑cost debt has been retired over the past two years, including Rs2.2 trillion in the current year.

Khurram Schehzad added that debt growth has slowed to 5%, down from a historical average of 12%, while the share of revenue devoted to debt servicing has dropped from 61% to 40%.

He also said privatization efforts are progressing, with three power‑distribution companies slated for launch by year‑end, and planned transactions in the energy, airport and banking sectors.

Advisor on Debt to the Finance Minister Omer Khan said Pakistan’s debt strategy is focused on sustainability, with the Average Time to Maturity (ATM) improving from 2.6 years three years ago to 3.9 years.

He noted that inflows to the Roshan Digital Account have risen by $300 million each month, and Pakistan has re‑entered international capital markets via Eurobond and Panda bond issuances.

He also announced the launch of sovereign debt tokenization and reported that Liability Management Operations reached Rs2.923 trillion in FY2026, including Rs1.927 trillion through State Bank of Pakistan instruments, and noted that external debt repayments totaled $1.8 billion.

Director of Domestic Debt Khaliq Uz Zaman emphasized that investor engagement has helped shape new debt instruments and boost market participation.

He said gross Sukuk issuance reached Rs3 trillion in FY2026, supported by a hybrid structure and retail participation through JazzCash, InvestPak, CDNS and Roshan Digital Accounts.

ATM rose to 3.9 years, average time to refixing improved to 1.3 years, and the weighted average cost of borrowing stayed at 11.2%, below the policy rate.

Zaman added that the yield curve showed a 19‑basis‑point spread between three‑month and five‑year borrowing, allowing medium‑term funding at rates close to short‑term financing.

He further stated that secondary‑market trading activity remained strong, with conventional securities volumes rising 25% year‑on‑year to Rs159,373, and Sukuk trading on PSX surged 275% to Rs973.

Looking ahead, Pakistan plans to launch its first short‑term sovereign Sukuk programme, targeting Rs400‑500 billion with three‑month and six‑month tenors to complete the sovereign Sukuk curve, broaden the investor base and support the domestic savings economy.

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