The Pakistan Stock Exchange (PSX) witnessed a strong bullish trend as share prices soared to an all-time high, approaching the 118,000-point mark. The benchmark KSE-100 index surged by 972.93 points, or 0.83%, closing at 117,974.02 points compared to the previous close of 117,001.09 points.
Mohammed Sohail, CEO of Topline Securities, linked the market rally to growing expectations that the government would collaborate with banks to resolve long-standing circular debt issues, which would benefit listed energy companies. Last week, the government announced an agreement with banks to provide Rs1.25 trillion in financing to Pakistan Holdings Limited (PHL), a state-owned entity, at a favorable floating interest rate of Kibor minus 0.90% per annum.
This initiative is part of a broader strategy to tackle the circular debt crisis plaguing Pakistan’s power sector. The crisis has been fueled by unpaid bills, electricity theft, and distribution losses, which have accumulated over the past decade. The circular debt issue remains a key point of discussion in Pakistan’s negotiations with the International Monetary Fund (IMF). While the government plans to retire Rs1.5 trillion of circular debt through Rs1.25 trillion in new borrowing and Rs250 billion in budget support, critics argue that this approach does little to address the root causes of the debt buildup.
Sana Tawfik, Head of Research at Arif Habib Limited, noted that the positive momentum had carried over from the previous week. She highlighted that trading volumes had improved since the first week of Ramadan, indicating increased buying activity. “On the economic front, significant progress has been made regarding the IMF deal. Additionally, steps taken to address circular debt have boosted market sentiment,” she added.
Topline Securities reported that the KSE-100 index reached a record high of 117,974 points, gaining 973 points (0.83%) during the session. The market’s upward trend was driven by strong buying activity from local institutions, with the index peaking at 118,244 points intraday. Key contributors to the rally included HUBC, MARI, ENGROH, SYS, and PPL, which collectively added 551 points to the index. Overall, 543 million shares were traded, with a total turnover of Rs32 billion.
According to reports, the IMF has allowed Pakistan to borrow Rs1.25 trillion ($4.5 billion) from domestic banks to manage the Rs2.4 trillion circular debt in the power sector without increasing public debt. This development, coupled with the IMF’s sharing of a draft Memorandum of Economic and Financial Policies (MEFP) with Pakistani authorities, has bolstered investor confidence. The draft marks progress toward a Staff-Level Agreement under the $7 billion Extended Fund Facility (EFF), raising hopes for continued financial support and economic stability.
The stock market’s bullish trend extended to a fourth consecutive session, with the KSE-100 index surpassing the 117,000-point barrier, driven by optimism surrounding the IMF’s positive assessment of Pakistan’s economy.
