Pakistan Stock Market Hits All-Time High on IMF’s Support for Debt Plan

Govt Raises Rs392 Billion in Treasury Bill Auction, Yields Stable

By DTD- On Mar 20, 2025

LAHORE: The Pakistan Stock Exchange (PSX) surged to a new all-time high on Thursday, driven by investor optimism following reports of the International Monetary Fund’s (IMF) readiness to approve the government’s circular debt management plan. The PSX’s benchmark KSE-100 Index gained 795.75 points, or 0.67%, closing at 118,769.77, marking a significant milestone in the stock market’s performance. The index hit an intraday high of 119,421.81 points, further fueling bullish sentiment.

Prime Minister Shehbaz Sharif expressed satisfaction over the record-breaking performance, highlighting the positive trend as a sign of growing investor confidence in the government’s economic policies. He credited the government’s focus on fostering a conducive business and investment environment over the past year for the improved economic indicators.

The market rally was also supported by ongoing discussions surrounding the privatization of state-owned enterprises (SOEs) and expectations of a reduction in industrial power tariffs. Furthermore, investors were buoyed by news of the IMF’s approval to grant Pakistan Rs1.25 trillion ($4.5 billion) in loans from domestic banks, aimed at reducing circular debt without increasing the country’s official public debt.

Ahsan Mehanti, CEO of Arif Habib Commodities, noted that the market’s all-time high was led by blue-chip stocks as investors responded to the IMF news and the government’s efforts to tackle circular debt. The discussions on the privatization of SOEs and the anticipated cuts in power tariffs added to the bullish momentum.

Technical analysts also pointed to the new market high, which encouraged fresh long positions from investors. Ahfaz Mustafa, CEO of Ismail Iqbal Securities, emphasized that the improved sentiment, along with the circular debt resolution, was renewing investor confidence in the market.

The government’s recent auction of market Treasury Bills, which raised Rs392 billion, also contributed to the positive sentiment, although it fell short of the Rs800 billion target. Despite this, yields on Treasury bills remained relatively stable, with the 12-month paper seeing a slight increase.

This marks the fifth consecutive session of gains for the stock market, with energy and banking stocks leading the bullish rally. The market’s continued upward trend reflects the growing optimism about Pakistan’s economic recovery, with investors capitalizing on the government’s fiscal reforms and the expected positive outcomes of IMF support.