PSX Appoints Meezan Bank as First Market Maker for GOP Ijarah Sukuk

The Pakistan Stock Exchange (PSX) has taken a major step forward by inducting Meezan Bank as the first market maker for the Government of Pakistan (GoP) Ijarah Sukuk. This strategic move is crucial for enhancing liquidity in the market for CDS-eligible government debt securities and deepening the secondary market for GoP Ijarah Sukuk. Since the initiation of GIS auctions on December 8, 2023, there has been a noticeable increase in participation from retail investors, reflecting a growing interest in Shariah-compliant investment options. This development not only supports the market’s liquidity but also highlights the expanding demand for ethical and Islamic financial instruments in Pakistan’s capital market.

Successful Initial Auction of Ijarah Sukuk

The maiden auction held in December 2023 exceeded all expectations, with bids totaling approximately PKR 481.3 billion against a target of PKR 30 billion, leading to an oversubscription by more than 13 times. This robust demand underscores the market’s confidence in Shariah-compliant financial instruments and highlights the economic stability of Pakistan. The Sukuk issuance was conducted through a fully automated system, which facilitated seamless trading and settlement processes, marking a milestone for PSX in its journey toward becoming a world-class exchange​ (Meezan Bank).

Meezan Bank’s Role and Expertise

Meezan Bank’s expertise in Islamic finance and Sharia principles played a crucial role in this achievement. Already a market maker for several listed Shariah-compliant debt securities, Meezan Bank’s involvement is expected to significantly boost the growth of Pakistan’s Islamic capital market. The bank’s commitment to promoting Islamic financial principles aligns with the government’s objective to transition towards a Riba-free economy, as highlighted by the recent decision of the Federal Shariat Court​ (The Nation).

Statements from Key Leaders

Farrukh H. Khan, MD and CEO of PSX emphasized that the inclusion of Meezan Bank as the first market maker is a positive development that will pave the way for more market makers in the future. Similarly, Syed Amir Ali, Deputy CEO of Meezan Bank, stated that this development is crucial for the enhancement of the local Sharia-compliant debt market and marks a significant step towards converting conventional banks into Islamic banksThe successful induction of Meezan Bank is anticipated to inspire other financial institutions to follow suit, further elevating Pakistan’s Islamic capital market. The overwhelming response to the initial Sukuk auction also demonstrates the increasing demand for ethical and Sharia-compliant investment opportunities among investors​ (Meezan Bank).