Islamabad: The government has notified its receipt of nearly PKR 300 billion in bids from investors against the Sukuk floated by the authorities concerned to raise funds for financing nearly 20% of the total budget outlay, a news source reported.
The bond was oversubscribed by nearly 50% on the first day. The officials have said that this shows market’s confidence in the economy. Although the price is yet to be released, it is expected to be Karachi Interbank Offer Rate (KIBOR) + 0.2% to 0.3%.
One of the primary reasons for oversubscription is the great returns on offer. The Sukuk settlement is made directly by the government.
The Sukuk has been floated to raise PKR 200 billion to retire the circular debt which has risen to PKR 1.2 trillion. Another PKR 804 billion circular debt is also parked in the Power Holding Company, which means the total circular debt stands at PKR 2 trillion.
