Pakistan Stock Exchange Hits All-Time 118,000 Points

The Pakistan Stock Exchange (PSX) witnessed a bullish rally as the benchmark KSE-100 index surged to an all-time high, nearing the 118,000-point mark.

On Tuesday, the index climbed 972.93 points, or 0.83%, to close at 117,974.02 points, up from the previous close of 117,001.09 points.

The government recently announced an agreement with banks to extend Rs1.25 trillion in financing to Pakistan Holdings Limited (PHL), a state-owned entity, at a favourable floating interest rate of Kibor minus 0.90% per annum. This move is part of a broader strategy to address the circular debt plaguing Pakistan’s power sector, which has accumulated due to unpaid bills, theft, and distribution losses over the past decade.

While the government aims 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 does little to address the root causes of the debt buildup.

Read: PSX KSE-100 Gains 700+ Points Despite IMF Delay

Investor confidence was further bolstered by progress in negotiations with the International Monetary Fund (IMF). Reports indicate that the IMF has permitted 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.

Additionally, the IMF shared a draft of the Memorandum of Economic and Financial Policies (MEFP) with Pakistani authorities, marking a significant step toward a Staff-Level Agreement under the $7 billion Extended Fund Facility (EFF). This development has reinforced hopes for sustained financial support and economic stability.

The stock market extended its bullish streak for the fourth consecutive session, with the KSE-100 index breaching the 117,000-point barrier on Monday. Analysts attribute the rally to improved trading volumes since the start of Ramazan and positive sentiment surrounding the IMF’s review of Pakistan’s economy.