Aurangzeb seeks foreign buyers as sovereign Sukuk passes Rs10tr

Pakistan has issued Rs10 trillion in sovereign Sukuk, Finance Minister Muhammad Aurangzeb said at a ceremony in Islamabad on Thursday, and he pressed banks, primary dealers and brokers to sell the Shariah-compliant instruments to foreign investors.

Aurangzeb said issuance rose 113 percent year on year to Rs4.4 trillion in 2026, from about Rs2 trillion a year earlier, Business Recorder reported. Issuance stood at nearly Rs761 billion in 2020, a five-year compound annual growth rate of about 22 percent.

The government has introduced hybrid Sukuk, which combine different Shariah-compliant structures, and short-term paper maturing in three to six months. The minister said the short-term instruments addressed a longstanding gap in the market and helped establish a Shariah-compliant yield curve across maturities.

Foreign participation has not kept pace. Aurangzeb said inflows through Special Convertible Rupee Accounts into Treasury Bills and Pakistan Investment Bonds had been positive, but overseas investment in Sukuk remained below expectations. He asked market participants to promote sovereign Sukuk internationally and draw foreign portfolio money towards Islamic paper.

He also called for wider retail access through digital platforms, saying people should be able to invest in Sukuk with amounts as low as Rs5,000 instead of leaving the market to institutions and large investors.

On the corporate debt market, the minister said the Ministry of Power had issued the first mandate to the National Debt Company, which is working on its first listed Sukuk. He said a successful issuance would set a benchmark for other companies. Investify, summarising a Profit by Pakistan Today report, said the mandate went to the National Grid Company.

Aurangzeb called for coordinated work by the Securities and Exchange Commission of Pakistan, the State Bank of Pakistan, the Pakistan Stock Exchange and the Central Depository Company to build an ecosystem for issuing and trading Sukuk.

Investify, summarising the Profit report, said Meezan Bank's president and chief executive and a member of the bank's Shariah board also spoke at the ceremony in support of Sukuk development.

Aurangzeb referred to Quranic teachings on informed reasoning and respectful debate and said financial experts and religious scholars should apply the principles of the Quran and Sunnah to new financial requirements. He urged stakeholders to work on common ground rather than differences.