Pakistan Stock Exchange (PSX) held a gong ceremony to mark the successful book building and listing of Pakistan Energy Sukuk II amounting to Rs200 billion. The book building process was managed by Pakistan Stock Exchange. The gong striking ceremony was held to formally mark this exciting event of the first ever debt issuance through book building and listing of the debt issue at the Exchange.
The Advisor to Prime Minister on Finance & Revenue, Dr. Abdul Hafeez Shaikh graced the occasion with his presence as the Chief Guest at the event. Also present were Aamir Khan, Chairman, Securities & Exchange Commission of Pakistan; Dr. Reza Baqir, Governor, State Bank of Pakistan; Sulaiman Mehdi, Chairman PSX and Members of the PSX Board –Farrukh H. Khan, CEO, PSX; Arif Usmani, President and CEO, National Bank of Pakistan; Zain Hussain, CEO, Taurus Securities; Irfan Siddiqi, President & CEO, Meezan Bank; Dr. Naim Abdullah, Head of Treasury, Dubai Islamic Bank Pakistan; Atif Bajwa, President & CEO, Bank Alfalah; Aqeel Karim Dhedhi, Chairman, Pakistan Stock Brokers Association; Arif Habib and Jahangir Siddiqi, former presidents of Karachi Stock Exchange; businessmen, senior management and other staff members of banks, institutions and aforementioned organizations.
It was an exciting event with the CEO PSX welcoming the guests, followed by the Chief Guest along with the transaction leads struck the gong to open the market. It was followed the remarks by Aamir Khan, Chairman SECP Chairman. Dr Abdul Hafeez Shaikh congratulated the team on bringing the Sukuk Issuance to fruition. He also appreciated the strong performance of the Exchange and congratulated PSX on being named the best performing market in Asia. This is particularly creditable considering the recent challenges faced by Pakistan and Karachi. Sulaiman Mehdi, and Farrukh Khan expressed their gratitude to the Chief Guest for his visit.
Welcoming the Chief Guest and other guests at the occasion, Farrukh Khan said, “It is an honour for me and all of us at PSX that the Honourable Advisor on Finance & Revenue, Dr. Abdul Hafeez Shaikh is visiting us to formally mark the listing of PHL’s Pakistan Energy Sukuk II. The competitive book building preceding the listing is a watershed event in itself not only for the Exchange and the capital market of the country, but also for the economy in general”. He further added, “It sets precedence for other debt listings to engage in the state-of-the-art competitive book building managed by the Exchange, which will enable the GoP and private companies to raise capital at the most competitive cost, while providing attractive investment opportunities to investors”.
Speaking at the occasion, Dr. Abdul Hafeez Shaikh said, “I congratulate all the market participants and transaction heads who made the listing of Pakistan Energy Sukuk II a success. It was an excellent team effort of Ministry of Finance Debt Office, SECP, SBP and PSX”. The Advisor further stated, “For the first time the Government raised Rs 200 billion through Sukuk at less than KIBOR rate, through competitive book building at PSX, saving Rs 18 billion over 10 years of debt servicing”.
The Energy Sukuk II is a Shariah-compliant debt instrument, which was issued through the competitive book building process managed by Pakistan Stock Exchange (PSX). This process allowed competitive price discovery and attracted a large number of investors. The success of this process can be gauged from the fact that the issue was over-subscribed by 70% or by about Rs139 billion. PHL Sukuk is a debt instrument with 10-year maturity with semi-annual profit payments for investors. It is a 100% SLR eligible government guaranteed security. The Government of Pakistan decided to issue the debt through PSX to improve pricing. PSX offers a state-of-the-art book building mechanism, which was used to determine the cut-off spread.
The competitive book building process for PES II helped raising the targeted amount of Rs200 billion at a rate less than the KIBOR rate. This translates to an annual interest saving of approximately Rs1.8 billion by the GoP as compared to the debt servicing on PES I, which was earlier issued as a debt security by PHL. The competitive book building process not only led to more competitive borrowing rates for the GoP but will also lead to greater liquidity and secondary market trading of the Sukuk. This was an all-round commendable effort on part of PSX along with the support and guidance of the SECP, SBP, and the Ministry of Finance. The book runners, NBP and Taurus Securities also did an admirable job of undertaking the large new issue.