KARACHI: Pakistan Stock Exchange (PSX) held a gong ceremony to welcome BankIslami Pakistan Limited (BankIslami) as ‘Market Maker’ for Shariah-compliant debt securities listed on PSX. The PSX management welcomed the BankIslami team and started the proceedings by striking the gong to mark the beginning of the trading day and the onboarding of BankIslami as market maker. Present at the occasion were Farrukh H. Khan, MD & CEO PSX; Ahmed Chinoy, Board Member PSX; Syed Amir Ali, President & CEO BankIslami; and senior management of both the organizations.
BankIslami successfully fulfilled all the requirements of market maker and was notified by PSX on June 15, 2021 as Designated Market Maker for Pakistan Energy Sukuk I and II. With this notification and the completion of regulatory formalities, BankIslami has become the first Islamic bank in Pakistan approved by SECP as licensed Consultant to the Issue (CTI) to act as Investment Agent & Advisor for Shariah compliant debt securities, both listed and privately placed. BankIslami celebrated these milestones with the local bourse and the market through this magnanimous gathering.
Welcoming BankIslami as market maker on PSX, Farrukh Khan, the MD PSX, said, “A large and liquid debt capital market is very important for the economic development of Pakistan. In line with the Capital Market Development Plan, the SECP and PSX recently introduced regulatory changes allowing banks to become market makers”. He added, “The addition of BankIslami Pakistan Limited, one of the top-tier Islamic banks in Pakistan, as market maker for Shariah-compliant debt securities on PSX is a significant step forward in the on-going collaboration between banks and the capital markets to bring liquidity and depth to Pakistan’s debt capital market”.
Talking about the new responsibility of BankIslami as market maker of debt securities on PSX, Syed Amir Ali, President & CEO BIPL, said, “As a market maker for the designated securities (PESC I & PESC II), we will help to add depth in the market for Islamic Fixed Income Securities by offering both bid and ask quotes to create liquidity for these securities. BankIslami applauds PSX’s initiative to allow multiple market makers for a single security because it would not only add transparency to the market but would also tighten the spreads which is very conducive for market participants and investors. As an Islamic Bank, blank sale and short selling are prohibited; therefore, the Bank, while adhering to Shariah principles, has to maintain an inventory of the underlying Shariah compliant securities.
To increase the supply of competitively priced Shariah compliant securities, BankIslami, as an Advisor & Investment Agent, is facilitating Pakistan’s national flag carrier – PIA to raise PKR 20 billion through GoP Guaranteed, SLR eligible, Privately Placed Listed, Shariah compliant sukuk to be issued through PSX Book building process and is named as “PIA Sukuk-I”.
For this landmark public sector, SLR eligible sukuk issuance, National Bank of Pakistan (NBP) and BIPL Securities Ltd. are our partners as Joint Book Runners. We would like to take this opportunity to thank the Ministry of Finance, SBP, SECP and specially PSX for providing their guidance, support and approvals to make this transaction a joint success”.
Last year, BankIslami successfully concluded the IPO and listing of BankIslami Ehad Sukuk which happened to be Pakistan’s first listed Additional Tier-1 Modarba Sukuk. BankIslami Ehad Sukuk not only helped the bank in strengthening its Tier 1 capital but also gave the investors an access to Shariah compliant listed instrument.
The confidence shown by the investors in BankIslami particularly in the challenging times due to Covid-19 was overwhelming. Currently, the Sukuk is being traded on its face value and has an investor base of 185, out of which 30 are institutional investors and rest are individuals.