Monitoring Desk
The Pakistan Stock Exchange (PSX) continued its record-breaking rally on Thursday, with the benchmark KSE-100 index surging by 1,215 points in intraday trading, breaching the 119,000 mark for the first time in history. The index climbed 1.03% to reach 119,189.48 at 9:43 am, driven by investor optimism surrounding Pakistan’s negotiations with the International Monetary Fund (IMF) and expectations of economic stability.
Market Drivers and Expert Insights
Market analysts credited the bullish trend to growing confidence in an imminent IMF staff-level agreement (SLA), which is expected to bring much-needed financial stability.
Mohammed Sohail, CEO of Topline Securities, noted that “buying by local funds is continuing in anticipation of Pakistan securing the IMF agreement soon.”
Yousuf M. Farooq, Director of Research at Chase Securities, highlighted that the rally was fueled by improved clarity on the IMF program, expectations of lower electricity prices, and a rebound in sectoral demand. “The market had paused ahead of the IMF review but has now surpassed its previous high,” he said.
Farooq urged retail investors to maintain a long-term perspective, emphasizing that the KSE-100 index has grown from just 1,500 points in 2000 to 119,000 today. He projected an annual return of 16-18%, with the potential for the index to double every 4-4.5 years.
Awais Ashraf, Director of Research at AKD Securities, echoed similar sentiments, stating that investors remained optimistic due to improving macroeconomic indicators and positive developments in the mining and automotive sectors.
Circular Debt Resolution and Economic Outlook
The government’s recent agreement with banks to extend Rs1.25 trillion in financing at a favorable interest rate is also contributing to the rally. The move aims to address Pakistan’s long-standing circular debt crisis, a key issue in the IMF negotiations.
The IMF has reportedly 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 adding to public debt.
Investor confidence was further reinforced as the IMF shared a draft of the Memorandum of Economic and Financial Policies (MEFP) with Pakistani authorities, signaling progress toward finalizing the SLA under the $7 billion Extended Fund Facility (EFF).
With strong buying interest and positive economic developments, analysts predict the bullish trend at PSX could sustain in the near term, provided macroeconomic stability continues.
