PSX, finance ministry hold investor briefing on febt strategy, Sukuk market and fiscal reforms

KARACHI, Jul 10 (APP): Pakistan Stock Exchange (PSX), in collaboration with the Ministry of Finance (MoF), on Thursday hosted an Investor Briefing Session to apprise stakeholders of the government’s debt management strategy, Sukuk issuance, secondary market development and ongoing fiscal reforms.

The session, held at the Dr. Shamshad Akhtar Auditorium, was attended by senior officials of the Ministry of Finance, PSX leadership, asset managers, banks, brokers and other market participants.

The event featured addresses by Advisor to the Finance Minister on Debt Omer Khan, Advisor to the Finance Minister Khurram Shehzad and Director Domestic Debt Khaliq Uz Zaman.

Managing Director and Chief Executive Officer of PSX, Farrukh H. Sabzwari, said the exchange continued to play a key institutional role in government debt issuance, highlighting the successful inaugural Government of Pakistan (GoP) hybrid Sukuk issuance.

He said GoP Sukuk issuance reached Rs 3.5 trillion in FY2026, compared to Rs 2.2 trillion in FY2025, while total capital market-based debt issuance increased to Rs 6.4 trillion. He added that average daily traded volume rose to Rs 3.9 billion from Rs 2 billion a year earlier.

Sabzwari said secondary market participation had expanded significantly, with 11 banks and three asset management companies granted direct market access, while 51 Bills and Bonds-enabled brokers were offering trading in GoP Sukuk, reflecting the growing strength of Pakistan’s debt market ecosystem.

Speaking on the occasion, Khurram Shehzad said the government’s fiscal strategy was based on three pillars — relief, growth and fiscal responsibility.

He said exporters were being supported through refinance facilities at 4.5 percent, compared with market rates of around 12 percent, while small and medium enterprises had benefited from reductions in super tax.

He said Pakistan’s debt-to-GDP ratio had improved from 75.2 percent in 2023 to 68.5 percent, while expensive debt worth Rs 4.7 trillion had been retired over the past two years, including Rs 2.2 trillion during the current fiscal year.

He added that debt growth had slowed to 5 percent, the lowest level in 15 years, while the share of government revenue spent on debt servicing had declined from 61 percent to 40 percent.

Shehzad said the privatization programme was progressing, with three power distribution companies expected to be launched by the end of the year, alongside planned privatization in the energy, airport and banking sectors.

Advisor on Debt Omer Khan said debt sustainability remained the central focus of Pakistan’s strategy.

He said the average time to maturity of public debt had increased from 2.6 years three years ago to 3.9 years, while inflows under the Roshan Digital Account had risen by around 300 million dollars per month, reflecting stronger overseas investor confidence.

Khan said Pakistan had re-entered international capital markets through strategic Eurobond and Panda bond issuances and was also introducing tokenization of sovereign debt, placing the country among a small number of nations pursuing the innovation.

He said liability management operations reached Rs 2.923 trillion in FY2026, an increase of 62.7 percent year-on-year, including Rs 1.927 trillion through State Bank of Pakistan instruments. Pakistan had also repaid 1.8 billion dollars in external debt, strengthening its debt profile.

Director Domestic Debt Khaliq Uz Zaman said transparent engagement with market participants remained central to the country’s debt management strategy, helping improve investor participation, price discovery and borrowing efficiency.

He said gross Sukuk issuance reached a record Rs 3 trillion during the fiscal year through a hybrid structure, supported by retail participation via JazzCash, InvestPak, Central Directorate of National Savings and Roshan Digital Accounts.

He said the weighted average cost of borrowing was contained at 11.2 percent, below the policy rate, while the average time to maturity was extended to 3.9 years, close to the government’s four-year target.

Highlighting market performance, he said trading in conventional securities increased by 25 percent year-on-year, while Sukuk trading through PSX surged by 275 percent, reflecting the growing depth of the Islamic capital market.

He said Pakistan would soon launch its first short-term sovereign Sukuk programme, targeting Rs 400-500 billion through three- and six-month tenors to broaden the investor base and further strengthen the domestic debt market.