The Pakistan Stock Exchange (PSX), in collaboration with the Ministry of Finance (MoF), hosted an Investor Briefing Session at the Dr. Shamshad Akhtar Auditorium. The event brought together senior representatives from the Ministry of Finance, PSX leadership, asset managers, banks, brokers, and other stakeholders to discuss Pakistan’s debt management strategy, Sukuk issuance, secondary market development, and fiscal reforms.
PSX CEO Highlights Record Sukuk Issuance
Farrukh H. Sabzwari, Managing Director & CEO of PSX, stated: “PSX continues its journey as a critical institutional partner to the government in debt issuance, with the successful inaugural GOP hybrid Sukuk issuance.” He reported that GOP Sukuk issuance in FY2026 reached PKR 3.5 trillion, nearly double the PKR 2.2 trillion recorded in FY2025. Overall issuance through the capital market has now reached PKR 6.4 trillion. Average Daily Traded Volume (ADTV) has risen to PKR 3.9 billion, compared to PKR 2 billion last year. Secondary market participation has expanded significantly, with 11 banks and 3 asset management companies (AMCs) provided direct market access, while 51 Bills & Bonds (BNB) enabled brokers already offer trading in GOP Sukuk. “These figures demonstrate the strengthening of Pakistan’s debt market ecosystem,” Sabzwari added.
Advisor to Finance Minister Outlines Fiscal Pillars
Khurram Shehzad, Advisor to the Finance Minister, remarked: “Pakistan’s budget management approach is built on three pillars: relief, growth, and fiscal responsibility.” He noted that exporters have been supported with refinance facilities at 4.5%, compared to market rates of 12%, while small and medium enterprises (SMEs) — which account for 92% of Pakistan’s businesses — have benefited from reductions in super tax. The debt-to-GDP ratio has improved from 75.2% in 2023 to 68.5% today, and early retirements of expensive debt have totaled PKR 4.7 trillion over the past two years, including PKR 2.2 trillion this year alone. Debt growth has slowed to just 5%, the lowest in 15 years, compared to an average of 12% previously. Debt servicing costs have also improved, with the share of revenue spent on debt falling from 61% to 40%. Shehzad added that privatization is advancing with three distribution companies scheduled for launch by year-end, alongside strong interest from international investors. Additional privatizations in the energy sector, airports, and banking are in the pipeline. “These initiatives, combined with fiscal consolidation and structural reforms, reflect a clear trajectory toward sustainable debt management and a more competitive capital market,” he concluded.
Debt Sustainability and Market Innovation
Omer Khan, Advisor on Debt to the Finance Minister, stated: “Debt sustainability is the central focus of Pakistan’s strategy.” He highlighted that the Average Time to Maturity (ATM) has increased from 2.6 years three years ago to 3.9 years today. On the external side, Roshan Digital Account (RDA) inflows have risen by $300 million per month, reflecting stronger interest from overseas investors. Pakistan has re-entered international capital markets with strategic issuances of Eurobonds and Panda bonds, priced competitively despite global volatility. Tokenization of sovereign debt is also being launched, making Pakistan one of the few countries globally to attempt this innovation. Liability Management Operations (LMO) peaked at PKR 2,923 billion in FY2026, up 62.7% year on year, including PKR 1,927 billion through State Bank of Pakistan (SBP) instruments. “With external debt paydowns totaling $1.8 billion, Pakistan is positioning itself for a more transparent, sustainable, and globally competitive debt profile,” Khan added.
Domestic Debt Director on Transparent Communication
Khaliq Uz Zaman, Director – Domestic Debt, stated: “Transparent communication with market participants is central to Pakistan’s debt management strategy. It ensures better participation, stronger price discovery, and ultimately lowers the cost of borrowing for the government.” He noted that feedback from investors has been invaluable in shaping new products — whether short term or long term, conventional or Shariah compliant. Over the past two years, every innovation in debt instruments has been the result of this dialogue, and issuance continues to be aligned with the overall portfolio and strategy. Debt policy is not isolated; it works in tandem with credible monetary policy (MP) and fiscal policy (FP), and this credibility has allowed the Debt Management Office (DMO) to build a long-term yield curve and strengthen investor confidence. FY2026 was a breakthrough year: gross Sukuk issuance reached PKR 3 trillion, the highest in any fiscal year, delivered through a hybrid structure and supported by a retail push via JazzCash, InvestPak, CDNS, and RDA. ATM was extended to 3.9 years, close to the 4-year target, while Average Time to Refixing (ATR) improved to 1.3 years. Weighted Average Cost (WAC) of borrowing was contained at 11.2%, even below the policy rate, reflecting cost optimization. The yield curve showed tight spreads, with just +19 basis points (bps) between 3-month and 5-year borrowing, allowing the government to lock in medium-term funding at near short-term rates. LMO peaked at PKR 2,923 billion, up 62.7% year on year, including PKR 1,927 billion through SBP instruments.
