- The KSE-100 index ends at 117,001.09, up 801.50 points.
- Intraday High reaches 117,202.09, an increase of 1,002.5 points.
- The index affects a weakness of 116,490.82 during the negotiation session.
The stock market extended its bullish sequence on Tuesday, closing the increase, because the optimism of investors remained strong following developments concerning the resolution of the circular debt and continuous progress in the program of the International Monetary Fund (IMF).
The KSE-100 index of Benchmark Kse-100 of Pakistan Stock Exchange (PSX) won 801.50 points, or 0.69%, to end at 117,001.09, against the previous fence of 116 199.59.
The index hit an intraday summit of 117 202.09, while the lowest level recorded during the session was 116,490.82. The energy sector, in particular, has experienced a strong purchase interest, while investors reacted to potential improvements in cash flows and the broader implications of the efforts to restructure government debt.
“Optimism concerning the resolution of the circular debt, the improvement of the cash flows of the energy chain and the success of the IMF program,” said Samiullah Tariq, research manager at Pak-Koweït Investment Company, highlighting the factors fueling the market rally.
In a significant development, the IMF authorized Pakistan to borrow RS1.25 Billions ($ 4.5 billion) from national banks to respond to its circular mounting debt without adding to its public debt, according to familiar officials.
This agreement was concluded as a result of political discussions between the Pakistani authorities and the IMF, during which Islamabad presented a six -year roadmap to manage the circular debt of 2.4 billions of rupees which increased the electricity sector.
IMF approval gives the government an essential budgetary space, because the new loans will not be included in the country’s official debt statistics. To finance the reimbursement of these loans, Pakistan will continue to collect an RS3 per kilowatt-hour the service supplement (DSS) on electricity bills, which should generate more than 300 billion rupees per year.
Under the plan, the government intends to retire 1.5 billion of circular debt rupees thanks to a combination of bank loans and income generated from the surcharge. In addition, the authorities plan to save 463 billion rupees after renegotiations with independent electricity producers (PPI) to reduce capacity payments and adjust tariff structures.
The IMF’s desire to adapt to this restructuring reflects its broader support for the reforms of the energy sector of Pakistan in the context of the prolonged fund of funds of $ 7 billion (EFF). Officials said Pakistan has provided the fund that improves collection mechanisms and operational efficiency would prevent the re -emergence of circular debt in the future.
The Minister of Power Awais Ahmed Khan Leghari commented on the issue, declaring that even if the government had not yet received an official decision, it remains optimistic that the IMF has approved the borrowing plan. He also specified that the DSS will remain unchanged and will continue to be part of any term sheet finalized with banks, the supplement remaining below RS3 per unit.
Meanwhile, the IMF shared a memorandum of economic and financial policies (MEFP) with the Pakistani authorities, marking another step towards the finalization of the process of examining in progress. The fund also reported its desire to relieve the construction and real estate sectors, although it remains uncertain if these incentives will be implemented immediately or included in the next budget budget for 2025-26.
Pakistan and the IMF team concluded discussions last week without concluding an agreement at the staff level (ALS), which is a prerequisite for the official Islamabad demand to receive the next $ 1 billion tranche under the EFF. The delay means that new political negotiations will take place in the coming days to reach a consensus before the IMF executive council examines the case of Pakistan.
The PSX began the week on a strong note, continuing the bullish momentum observed during the previous sessions. Monday, the reference index KSE-100 closed 663.42 more points, or 0.57%, at 116,199.59 points, against 115,536.17 points recorded in the previous session.
The highest level of index reached during the Monday session was 116,626.83, while the lowest level was recorded at 115,883.22 points.