Pakistan to issue 'Ijara Sukuk' in domestic capital market

Pakistan’s ministry of finance is all set to issue Ijara Sukuk in the domestic capital market in January 2020. (AP/ File Photo)
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Updated 10 December 2019

Pakistan to issue 'Ijara Sukuk' in domestic capital market

  • The move will raise funds for government's budgetary support 
  • Also provide investment avenues for Islamic banking industry to utilize its surplus liquidity

KARACHI: Pakistan’s ministry of finance is all set to issue Ijara Sukuk in the domestic capital market in January 2020 to support the government's budgetary position, the ministry spokesman said on Tuesday.

“The size (of Ijara Sukuk) is undetermined. It will be approved soon after some clarifications,” Omar Hamid Khan, spokesperson of the ministry of finance, told Arab News.

The federal cabinet on Tuesday, chaired by Prime minister Imran Khan, was expected to approve the issuance of Ijara Sukuk but delayed the decision over certain reservations, Firdous Ashiq Awan, the de facto information minister of Pakistan, told media after the cabinet meeting. 

The Sukuk would also provide investment avenues to the Islamic banking industry to utilize its surplus liquidity.

“Islamic banks have surplus liquidity of around Rs 500 billion (well over the determined size of Ijara Sukuk),” Ahmed Ali Siddiqui, Deputy convenor of Standing Committee of Federation of Pakistan and Chambers of Commerce on Islamic Banking told Arab News.

“Islamic banks’ deposits have grown to Rs 2.5 trillion”, Siddiqui, who is also the Director of Centre for Excellence in Islamic Finance (CEIF) at the Institute of Business Administration (IBA), said.

As the finance ministry is open to increase the size of the bond issue in response to market reaction, the Islamic finance experts are confident that the issue would be oversubscribed in the current situation where only one Sukuk is going to be mature in March 2020.

The Ijara Sukuk, which is backed by real assets, will be issued against the unencumbered land of Jinnah International Airport (JIA) Karachi.

Though the evaluation process of JIA Karachi’s assets continues, the expert awaiting final evaluation report says that it could be around Rs 500-600 billion, which means the Ijara Sukuk could not be issued more than the asset value.

At least 105 killed, 96 injured by extreme weather in Pakistan

Updated 17 January 2020

At least 105 killed, 96 injured by extreme weather in Pakistan

  • The majority of casualties have been reported in Azad Kashmir
  • In Balochistan, all blocked roads are already open for traffic

ISLAMABAD: At least 105 people have been killed and 96 injured by avalanches, landslides and other extreme weather-related incidents, mainly in Azad Kashmir, Balochistan, Gilgit-Baltistan, and Khyber Pakhtunkhwa, the National Disaster Management Authority (NDMA) confirmed on Friday.
The number of destroyed houses has risen to nearly 1,300 as rescue efforts continue and more reports are arriving.

Rescue workers clear a snow-covered road to make way for an ambulance to reach the areas affected by heavy snowfall and avalanches, in Neelum Valley near line of control (LoC) in Pakistan on Jan. 14, 2020. (REUTERS)

The majority of casualties have been reported in Azad Kashmir, where heavy rains and snowfall triggered avalanches, especially in the Neelum Valley area.
The avalanches and other rain-related incidents have killed 78 people, NDMA spokesman Saqib Mumtaz, told Arab News on Thursday evening. Fifty-six people were injured in the region.
“Food and non-food relief items including tents, blankets, first aid kits, tarpaulins, kitchen accessories, plastic mats and mattresses were distributed in the affected areas of district Neelum Valley,” the NDMA said in an earlier statement.

A man removes snow from outside his house after heavy snowfall, in Keran, a small town in Neelum Valley, in Azad Kashmir on Jan. 14, 2020. (AP)

Prime Minister Imran Khan on Wednesday visited Muzaffarabad, the capital city of Azad Kashmir, to review the ground situation and see the injured at a military hospital in Muzaffarabad.
In Balochistan, local government spokesman Liaquat Shahwani said that 20 people were killed in various extreme weather-related incidents in the province. “The situation is under control and all stranded people have been rescued,” he said. According to NDMA, another 23 people were wounded.

Rescue and relief efforts are underway on Jan. 15. (Photo courtesy: ISPR)

Five people died and 13 were injured in Khyber Pakhtunkhwa, while two people died and four were injured in Gilgit-Baltistan, according to the NDMA’s data from Friday.
Government authorities are working to clear the roads in the affected areas. In Balochistan, all are already open for traffic.
The Pakistan Meteorological Department (PMD) has warned that heavy rains and snow in northwestern parts of Balochistan may result in flash floods. The province has recorded the heaviest snowfall in two decades, according to the PMD.

Local residents carry water pots above their heads as they walk back to their homes after heavy snowfall in Khanozai area some 75 kms in northeast of the provincial capital Quetta on Jan. 14, 2020. (AFP)

A westerly wave has also engulfed the upper parts of the country, the PMD said in a statement on Tuesday, forecasting cold and dry weather in most parts of Pakistan and extremely frigid climate in north Balochistan.
Floods in Balochistan have reportedly affected the freight train service between Pakistan and Iran.