PSX to hold first-ever Sukuk auction today

The Ministry of Finance is issuing for the first time a one-year Islamic bond through the Pakistan Stock Exchange (PSX) on Friday to raise Rs30 billion. As opposed to the earlier practice where commercial banks would place bids for the government debt, the new method will allow the general public to participate directly in the bond auctions. This is expected to bring the interest or profit rate on the government debt down because of mass participation from a cross-section of investors, including retail ones who’ll get to make risk-free investments through the stock exchange easily. Moreover, the listed status of the government debt will enable investors to buy and sell the bonds on the exchange just like ordinary shares.