Connect with us

Hi, what are you looking for?

Capital Business
Capital Business
Stockbrokers discuss share prices under a digital board during a trading session at the Karachi Stock Exchange on November 18, 2014/AFP

World

Pakistan floats $1 billion Islamic bonds

Stockbrokers discuss share prices under a digital board during a trading session at the Karachi Stock Exchange on November 18, 2014/AFP

Stockbrokers discuss share prices under a digital board during a trading session at the Karachi Stock Exchange on November 18, 2014/AFP

KARACHI, November 27- Pakistan has sold $1 billion in Islamic bonds to raise its foreign exchange reserves in line with IMF demands.

The government had initially planned to float $500 million worth of the bonds — known as “Sukuk” — on the global capital market, but was inundated by offers worth $2.3 billion.

“The government decided to accept offers of $1 billion for a five year tenure at the profit rate of 6.75 percent,” Pakistan’s ministry of finance statement said Wednesday.

The Sukuk is a Sharia compliance bond that offers profits rather than interest to its subscribers.

Finance minister Ishaq Dar had marketed the instrument through roadshows in Abu Dhabi, Dubai, Singapore and London.

According to a statement from his office, 35 percent of subscribers came from Europe, 32 percent from the Middle East, 20 percent from North Africa and 13 percent from Asia.

Pakistan will use the debt to retire its formidable domestic debts of around $150 billion that account for about 50 percent of the country’s GDP.

The bond will also help raise country’s foreign exchange reserves of $13.5 billions by another $1 billion of the Sukuk proceedings.

“This will contribute significantly in achieving already declared target of taking the national forex reserves to $15 billion by end December,” Dar said.

By the end year, Pakistan is also expected to get $1.1 billion installment of an International Monetary Fund (IMF) facility.

Advertisement. Scroll to continue reading.

The country was granted the $6.6 billion IMF bailout package last year to help achieve economic reforms.

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...