State Bank of Pakistan Aims to Secure Rs150bn in GIS Auctions: Nov-Jan Auction Calendar
Breaking down the targets, the Rs70 billion for GIS FRR includes Rs30 billion earmarked for the 3-year bond and Rs40 billion for the 5-year GIS FRR. Meanwhile, under GIS VRR, the respective targets for bonds are Rs10 billion for 1-year, Rs30 billion for 3-year tenure, and Rs40 billion for 5-year GIS VRR.
Karobar
In a strategic move to bolster the Pakistan economy, the government is eyeing a significant financial infusion of Rs150 billion over the next three months (November-January) of FY24 through the auction of GOP Ijara Sukuk (GIS).
The recently unveiled auction calendar by the State Bank of Pakistan (SBP) outlines a single auction during this period, slated for November 30.
During this auction, the central bank has set a target of raising Rs70 billion through the sale of GIS Fixed Rental Rate (FRR), with an additional Rs80 billion to be secured through GIS Variable Rental Rate (VRR).
For the upcoming auction on November 30, the central bank will issue fresh bonds with tenors of 1, 3, and 5 years for both GIS VRR and GIS FRR.
Notably, in accordance with amendments made by the central bank, GIS will now be issued against the identified asset of the Pakistan Sports Board (PSB), incorporating the Pakistan Sports Complex. This identified asset will be used in conjunction with the recognized, unencumbered, and undisputed land of PSB surrounding the asset. Detailed information on the structure and assets is provided in 'Annexure-A.'
In a related development, the Ministry of Finance has introduced amendments pertaining to non-competitive bids (NCBs) in GIS auctions. Individual investors have been excluded from entities eligible to submit NCBs, as outlined in the notification. Additionally, Primary Dealers (PDs) are now required to submit NCBs with the name/account title of the investor and the investment amount without specifying the margin/rate, following the format in 'Annexure-B' (in Excel form), a departure from the previously specified format outlined in Annexure G.
