BankIslami Sukuk Certificates Begins Its Trading At PSX

BankIslami Ehad Sukuk Certificates began its trading at Pakistan Stock Exchange (PSX) here Friday as its CEO and President Syed Amir commenced the listing of the Sukuk issue worth Rs. 2 billion inclusive of a Green Shoe Option of Rs.500 million

KARACHI, (UrduPoint / Pakistan Point News - 15th May, 2020 ):BankIslami Ehad Sukuk Certificates began its trading at Pakistan Stock Exchange (PSX) here Friday as its CEO and President Syed Amir commenced the listing of the Sukuk issue worth Rs. 2 billion inclusive of a Green Shoe Option of Rs.500 million.

In keeping with the tradition CEO of The BankIslami Pakistan Limited commenced the listing of the Sukuk by striking PSX gong to open the market amidst the presence of PSX President, Farrukh H Khan, CFO - BankIslami, Sohail Sikander, Head of Investment Banking, BankIslami Haris Munawwar, representatives of NEXT Capital, JS Global and select team members.

Syed Amir Ali on the occasion mentioned that these certificates were country's first ever listed Additional Tier (ADT-1) Mudaraba Sukuk and that its popularity among potential investors could be gauged from the fact that its IPO was oversubscribed by 1.07 times despite the COVID-19 pandemic lockdown in most parts of the world.

"The Ehad Sukuk IPO witnessed a remarkable response from online subscription channels with more than 80% applications received via e-IPO platforms," said President of BankIslami Pakistan Limited.

BankIslami Ehad Sukuk Certificate was cited to be fully paid up, non cumulative and contingent convertible Mudaraba Sukuk certificates that will qualify as ADT-1 Capital with its Pre IPO portion subscribed by 27 institutional investors and 45 individual investors.

PSX Managing Director, Farrukh Khan welcoming the listing of warranted certificates on PSX said there was dearth of Shariah compliant debt instruments for investors hence listing of Ehad Sukuk was a step in the right direction for providing investors with shariah compliant investment alternatives, easily accessible through stock exchange.

"Pakistan Stock Exchange is at the forefront of providing new avenues of investment, be it conventional or shariah compliant," he said adding that PSX aims to provide a transparent and robust trading platform for investors.

Najam Ali, CEO of Next Capital Limited (consultant to the issue) said it was a matter of great pride to for his company to conclude the IPO and listing of first Additional Tier 1 Sukuk in these challenging and uncertain times.

"Investors response to the IPO during the ongoing pandemic was very encouraging as we managed to conclude the IPO with 127 applications resulting in oversubscription," he said.

Success of this IPO, he said was a testament to investors' confidence in BankIslami that has delivered impressive performance during previous year and this was besides its contribution to the development of listed debt market which is in a nascent stage in the country.

Najam Ali thanked Securities and Exchange Commission of Pakistan and Pakistan Stock Exchange for their support towards the initiative adding that the issue amount will contribute towards Additional Tier1 Capital of BankIslami for Capital Adequacy Ration as per guidelines set by State Bank of Pakistan.

The raised funds were stated to be utilized in the Bank's financing and investment activities (general pool) as permitted under Memorandum and Articles of Association.

BankIslami Ehad Sukuk certificates hold a floating expected profit rate of three months Kibor plus 275 points and their face value is Rs.5000 per certificate. The profit payments of Sukuk will only be paid from relevant month's attributable profit from the general pool.

The instrument has been rated A- (A minus) of PACRA while according to PSX sources listing of this shariah compliant instrument will generate significant interest among investors, traders and the general public.

Due to coronavirus pandemic, listing announcement and striking of the gong was done with minimal presence of people and was broadcast live on digital platforms.