Karachi: The latest auction for Government of Pakistan (GoP) Hybrid Sukuk (GHS) and GoP Ijarah Sukuk (GIS), conducted through the Pakistan Stock Exchange (PSX) Auction System on May 18, 2026, concluded without any accepted bids. This outcome underscores the current market uncertainty surrounding the issuance of these financial instruments.
The auction, which aimed to raise funds through both competitive and non-competitive bidding, was set against a pre-auction target of Rs. 50 billion for the GIS and Rs. 100 billion for the GHS. However, despite receiving bids across both 3-year and 5-year fixed rental rate tenors for the Hybrid Sukuk, all submitted bids were ultimately rejected. The total face value of the bids for the 3-year GHS amounted to Rs. 21.38 billion, while the 5-year GHS saw bids worth Rs. 15.85 billion. Nonetheless, none of these bids met the acceptable criteria set by the authorities.
The auction also included a 10-year fixed rate zero coupon GoP Ijarah Sukuk, marking its fourth re-opening since the original issue date of January 22, 2026. According to information available from the Pakistan Stock Exchange (PSX), bids for this tenor reached a face value of Rs. 10 billion. However, similar to the Hybrid Sukuk, all bids for the Ijarah Sukuk were also rejected.
This rejection of bids across the board reflects a lack of alignment between the offered rental rates and market expectations. The market dynamics, as indicated by the range of rental rates and price premiums observed during the auction, did not satisfy the financial thresholds required for acceptance.
The auction’s settlement date was scheduled for May 19, 2026. Despite the absence of successful bids, the auction process serves as a critical gauge of investor sentiment and market conditions in the designated market category of government securities.
The results of this auction highlight the challenges faced by the government in securing favorable terms in the current economic climate. The rejection of bids may prompt a reassessment of strategies to attract investor interest in future Sukuk issuances.