ISLAMABAD: The government has successfully issued Ijarah Sukuk amounting Rs 3,150.6 billion as of June 30, 2023.
The Securities and Exchange Commission of Pakistan (SECP) on Monday released its first “Islamic Finance Bulletin” for the financial year 2022-23.
The market capitalization of Shariah compliant companies at Pakistan Stock Exchange (PSX), amounted Rs 4,149.83 billion out of the Rs 6,369.47 billion of total market capitalization, the SECP data revealed.
The Central Depository Company of Pakistan Limited held a total of 138 Shariah-compliant securities, including Islamic commercial papers (ICPs), Sukuk, Modaraba certificates and Islamic units offered by Mutual funds, apart from shares of Shariah-compliant companies in financial year 2022-23, as compare to 120 at the end of 2021-22.
During the financial year 2022-23, the government raised Rs 847.6 billion through Sukuk issuance from the domestic market. Previously, a public sector company named Power Holding Limited (PHL), raised Rs 200 billion in 2020 through the issuance of Pakistan Energy Sukuk–II, listed at PSX through book-building process for the very first time. The listing of oversubscribed Pakistan Energy Sukuk-II has remained instrumental in saving cost of capital for the government at the one hand and enhancing investors’ returns on the other. The Sukuk was aimed at settlement of circular debt in the power sector.
The SECP has published its first “Islamic Finance Bulletin” for the financial year 2022-23, aimed at providing up-to-date data, insights into new developments, and a deeper understanding of regulatory reforms in the Islamic financial services industry. The Islamic Finance Bulletin additionally, it provides essential information on the Islamic financial services industry including Islamic capital markets, non-banking financial institutions, and Takaful, while also offering a future perspective on SECP policies, regulated sectors, and cooperation.
The SECP has conducted a diagnostic review of Islamic finance in its regulated sectors and subsequently published its report in February 2023, capturing information, data, challenges, and opportunities along with policy recommendations. Further, it has decided to it has been decided to publish quarterly data on Islamic finance, with the exception of data on Islamic banking. This Islamic Finance Bulletin therefore presents a quarterly overview of development in Islamic finance during the financial year ended on June 30, 2023.
Despite facing challenges in economic transformation, Pakistan's Islamic finance sector has made significant progress and now making currently makes up a significant portion of the country's financial landscape. The Federal Shariat Court's 2022 ruling in 2022 to eliminate Riba and transform the economy in five years has accelerated these efforts, indicating continued growth in the sector.
Moreover, for a comprehensive understanding of Pakistan's complete Islamic financial system, the SECP also encourages readers to refer to the Islamic Banking Bulletin published by the State Bank of Pakistan.
Copyright Business Recorder, 2024
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