KARACHI: The Pakistan Stock Exchange (PSX), in collaboration with the Ministry of Finance, hosted an investor briefing session at the Dr Shamshad Akhtar Auditorium to discuss the country’s debt management strategy, sukuk issuance, secondary market development and fiscal reforms.
The session brought together senior representatives of the Ministry of Finance, PSX leadership, asset managers, banks, brokers and other stakeholders. Guest speakers included Adviser on Debt to the Finance Minister Omer Khan, Adviser to the Finance Minister Khurram Schehzad and Director, Domestic Debt Khaliquz Zaman.
Farrukh H Sabzwari, managing director and CEO of PSX, said the exchange continued its role as a critical institutional partner to the government in debt issuance, citing the successful inaugural GOP hybrid Sukuk issuance. GOP Sukuk issuance in FY2026 reached Rs3.5 trillion, nearly double the Rs2.2 trillion recorded in FY2025, taking overall issuance through the capital market to Rs6.4 trillion. Average daily traded volume rose to Rs3.9 billion, compared with Rs2 billion last year. He added that secondary market participation had expanded significantly, with 11 banks and three asset management companies given direct market access, while 51 Bills and Bonds enabled brokers now offer trading in GOP Sukuk.
Khurram Shehzad said the budget management approach rested on three pillars: relief, growth and fiscal responsibility. Exporters have been supported with refinance facilities at 4.5 per cent, against market rates of 12 per cent, while small and medium enterprises, which account for 92 per cent of Pakistan’s businesses, have benefited from reductions in super tax. He said the debt to GDP ratio had improved from 75.2 per cent in 2023 to 68.5 per cent, with early retirements of expensive debt totalling Rs4.7 trillion over two years, including Rs2.2 trillion this year alone. Debt growth had slowed to 5.0 per cent, the lowest in 15 years, while the share of revenue spent on debt servicing fell from 61 per cent to 40 per cent. He said privatisation was advancing, with three distribution companies scheduled for launch by year end and further privatisations planned in the energy, airports and banking sectors.
Omer Khan said debt sustainability remained central to Pakistan’s strategy, with average time to maturity rising from 2.6 years three years ago to 3.9 years today. Roshan Digital Account inflows had risen by $300 million per month, he said, reflecting stronger interest from overseas investors, while Pakistan had re-entered international capital markets through Eurobond and Panda bond issuances priced competitively despite global volatility. He said tokenisation of sovereign debt was also being launched, and that Liability Management Operations peaked at Rs2,923 billion in FY2026, up 62.7 percent year on year, including Rs1,927 billion through State Bank of Pakistan instruments, alongside external debt paydowns of $1.8 billion.
Khaliquz Zaman said transparent communication with market participants remained central to the debt strategy, ensuring stronger price discovery and lower borrowing costs. He said FY2026 was a breakthrough year, with gross Sukuk issuance reaching Rs3 trillion, the highest in any fiscal year, supported by a retail push via JazzCash, InvestPak, CDNS and RDA. Average time to maturity was extended to 3.9 years, close to the four year target, while average time to refixing improved to 1.3 years. The weighted average cost of borrowing was contained at 11.2 per cent, below the policy rate, with the yield curve showing a spread of just 19 basis points between three month and five year borrowing.
Secondary market volumes also showed strong momentum with conventional securities recording growth of 25 per cent year-on-year (YoY) to reach Rs159,373, while Sukuk trading through the PSX surged by 275 percent to Rs973. Pakistan’s first short term Sukuk programme, targeting Rs400 to Rs500 billion in three- and six-month tenors, is expected to complete the sovereign Sukuk curve and broaden the investor base.
