IMF review conclusion props up stocks
Pakistan Stock Exchange (PSX) on Monday notched up significant gains as the benchmark KSE-100 index touched the intra-day high of nearly 1,100 points before settling with an increase of 663 points.
The surge was driven by a host of factors, including the successful conclusion of the International Monetary Fund (IMF) review, resulting in notable progress towards securing the second $1 billion loan tranche under the Extended Fund Facility (EFF).
Analysts pointed out that the bullish momentum was further fuelled by the IMF's decision to lower the tax collection target for FY25 and rising global crude oil prices. The market also responded strongly to the government's steps to clear the circular debt pile-up.
According to Ahsan Mehanti of Arif Habib Corp, stocks closed higher after the IMF review concluded with significant progress towards a staff-level agreement for the release of over $1 billion in loan tranche and speculation about the likely approval of over $1 billion worth of Climate Resilience Facility.
He added that the reduction in FY25 tax collection target by the IMF to Rs12.37 trillion, surging international crude oil prices and the bull-run in global equities played the role of catalysts in bullish close at the PSX.
At the end of trading, the benchmark KSE-100 index recorded an increase of 663.42 points, or 0.57%, and settled at 116,199.59.
In its review, Topline Securities commented that the stock market experienced a positive session, with the benchmark index reaching the peak of 1,091 points. It closed at 116,199, marking a gain of 663 points.
The positive performance was influenced by the government's initiatives to tackle the power-sector circular debt, though a Rs1.25 trillion deal still awaited final approval. Furthermore, the IMF described the progress on its $7 billion loan programme as "strong," despite the absence of a staff-level agreement, the brokerage house said.
The market's gains were mainly driven by Mari Petroleum, Pakistan State Oil (PSO), Lucky Cement, Oil and Gas Development Company (OGDC) and The Searle Company, which collectively added 658 points to the index. Conversely, Fauji Fertiliser Company, Engro Fertilisers and Hub Power dragged the index down by 200 points, Topline noted.
Arif Habib Limited (AHL) stated that the KSE-100 index saw an accelerated upside momentum at the start of the week to cross 116,000 points.
Some 49 shares rose while 45 fell, with Mari Petroleum (+7.32%), PSO (+4.3%) and Lucky Cement (+1.97%) contributing the most to the index gains, it said. Mari Petroleum made a gas and condensate discovery at the Spinwam-I well, having gas flow at 20.485 million cubic feet per day and condensate flow at 117 barrels per day.
AHL pointed out that Pakistan's government raised the tax on petroleum to meet IMF's expectations before the lender could release the next loan tranche. "Support is at 115,000 points, against which new all-time highs should be hit in the near term," it added.
JS Global analyst Muhammad Hasan Ather noted that the PSX resumed its bullish momentum on the back of positive updates regarding the IMF review. The index surged to the intra-day high of 116,627 (+1,090 points) before profit-taking pared gains. It closed at 116,199 (+663 points).
Looking ahead, the market was expected to maintain its bullish momentum, supported by the anticipated resolution of circular debt issue and a favourable outcome of the IMF review, the analyst added.
Overall trading volumes increased to 507.5 million shares compared with Friday's tally of 360.5 million.
Shares of 448 companies were traded. Of these, 179 stocks closed higher, 211 fell and 58 remained unchanged. The value of shares traded during the day was Rs34.1 billion.
Pak Electron was the volume leader with trading in 48.3 million shares, gaining Rs2.92 to close at Rs45.54. It was followed by The Bank of Punjab with 46.6 million shares, gaining Rs0.38 to close at Rs11.67 and Pakistan International Bulk Terminal with 36.4 million shares, gaining Rs0.26 to close at Rs10.18. During the day, foreign investors sold shares worth Rs362.8 million, the NCCPL reported.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
6 hours ago
- Business Recorder
Pakistan secures over $1.5 billion for climate action amid rising environmental pressures
Amid intensifying climate risks, Pakistan has mobilized over $1.5 billion in climate finance to combat environmental degradation and build resilience, according to the Pakistan Economic Survey 2024-25. The funding includes $1.4 billion under the IMF's Resilience and Sustainability Facility (RSF) and $82 million from the Green Climate Fund, alongside the launch of a Rs30 billion Green Sukuk and the National Climate Finance Strategy. These investments back a sweeping set of initiatives, including the National Adaptation Plan – endorsed by the federal cabinet – which lays out 117 adaptation measures across six vulnerable sectors. Projects like Recharge Pakistan, a $77 million program for ecosystem-based flood management, and the Pakistan Glacier Protection Strategy are central to the country's climate resilience roadmap. Despite contributing less than 1% of global emissions, Pakistan is bearing a disproportionate burden of climate change. The State of the Pakistan Climate 2024 reported a 31% spike in average rainfall and a national temperature rise to 23.52°C, with Sindh and Balochistan enduring extreme heat, cyclones, and erratic weather patterns. To tackle urban vulnerability and emissions, the government introduced the Pakistan Green Building Code, advanced an Urban Resilience Policy Framework, and promoted a low-carbon transport agenda through the CPEC-II Green Corridor. Additionally, the country's first-ever Carbon Market Policy aims to attract clean-tech investments and incentivize decarbonization. Economic Survey 2024-25: Pakistan misses growth target Provinces are also aligning with the federal push. Punjab launched its Climate Resilient Vision 2024 and anti-smog measures, Sindh finalized a Provincial Climate Action Plan, and KP continued its massive reforestation drive, adding 121.5 million trees under the 10 Billion Tree Tsunami. Balochistan, meanwhile, enforced an anti-plastic law and initiated a Climate Finance Cell. At COP29, Pakistan highlighted these initiatives at its national pavilion, reinforcing its climate ambition on the global stage. Yet, the Survey warns that international support and climate justice remain critical, as Pakistan's exposure to worsening climate shocks far outweighs its emissions footprint. With climate volatility escalating, Pakistan's progress hinges on turning financial pledges into results, scaling provincial efforts, and securing long-term global partnerships.
Business Recorder
a day ago
- Business Recorder
Budget FY26: PSX proposes to resolve provincial jurisdiction differences over collection of sales tax on services at CCI
The Pakistan Stock Exchange (PSX) has urged the federal and provincial governments to raise the issue of jurisdiction differences among provinces over the collection of sales tax on services at the Council of Common Interest (CCI), anticipating the credible body would amicably device 'a (revenue) sharing formula for each province' to settle the grave matter of concern. The bourse said that provincial sales tax is applicable on services including fund and assets management. 'The wordings of the laws enacted by the Sindh Revenue Board, Punjab Revenue Authority and Khyber Pakhtunkhwa Revenue Authority are overlapping as the law governing Sindh Sales Tax enacted by Sindh Revenue Board states that sales tax is to be provided where business is registered while Punjab Sales Tax on Services Act, 2012 and Khyber Pakhtunkhwa Finance Act 2013 states that the province where taxable services are provided or rendered by the service provider is entitled to levy, charge and collect sales tax on such services. 'We (PSX) request that this issue, being of equal relevance to all the provinces and affecting the entire services sector, may be placed on the agenda of the Council of Common Interests so that a sharing formula for each province can be devised to resolve this matter,' the set of budget proposals reads,' the bourse statement said. The three provinces collect sales tax on services at the standard rates in the range of 15-16% of the value of the services rendered. But in the case of the telecommunication services, some provinces charge the tax at the rate of 19.5%. The management of the stock market highlighted the issue in its set of budget proposals for FY26 already sent to the Ministry of Finance, as the dispute over collection of the sales tax on services is 'affecting the entire services sector' including the firms listed at PSX. The stock market facilitated trade in shares of around 550 companies having a total market capitalisation of Rs14.73 trillion (around $52 billion, or 12.7% of Pakistan's gross domestic product (GDP) of FY25), it was learnt. Elimination of minimum tax recommended PSX further requested that 'minimum tax regime should be eliminated from listed companies as such companies are strongly compliant towards specific documentation requirements of various statutes'. It elaborated that the minimum tax on listed companies discourages documentation of the economy. Listed firms already meet extensive regulatory requirements, including audits, tax filings, advance tax payments, and withholding statements, ensuring their accounts align with statutory norms and build trust with authorities. 'However, the levy of minimum tax puts a downward impact on the earnings of listed companies despite having current and brought forward losses.' PSX also proposed enhancing tax credit for listed small and medium enterprises (SME), as they contribute immensely to Pakistan's employment, exports and GDP growth, and provide 80% of all employment in the country. 'In order to encourage small and medium enterprises to get listed on the SME Board, it is proposed that the rate of tax for such listed SME companies be permanently lowered by giving tax credit of 50% of tax payable for 3 to 4 years of listing and then onwards 20% of the tax payable,' it proposed. Besides, it requested to align rates of capital gains tax (CGT) on disposal/sale of securities with rates of CGT on sale of immovable property, align rates of CGT for all derivatives and future contracts traded on PSX with future commodity contracts traded on Pakistan Mercantile Exchange (PMEX), document real estate sector and promote Real Estate Investment Trusts (REITs), and proposed tax relief for foreign investment flows at PSX. To encourage more companies to get listed at PSX, it urged the government to expedite digitisation of the payment system and documentation of the economy through deploying the technology, as 'estimates of the cash-based economy range from 35% to 50% of GDP'.
Express Tribune
3 days ago
- Express Tribune
PSX makes history on macro boost
Listen to article The Pakistan Stock Exchange (PSX) sustained its bullish streak in the outgoing week, with the benchmark KSE-100 index surging to an all-time high of 121,798 points on June 4, before settling at 121,641, marking a weekly gain of 1,950 points (+1.63%). The rally was fueled by renewed investor confidence following successful budget talks with the International Monetary Fund (IMF), the Asian Development Bank's (ADB) approval of a $800 million financing package and the government's finalisation of a Rs1.275 trillion circular debt resolution deal with banks – a significant development for the energy sector. Macroeconomic indicators further supported sentiment as petroleum sales jumped 10% year-on-year (YoY) in May 2025, the Consumer Price Index (CPI)-based inflation eased to 3.5% and the trade deficit narrowed 23% month-on-month (MoM). However, the State Bank's reserves dipped slightly by $7 million, settling at $11.5 billion. On a day-on-day basis, the PSX attempted once again on Monday to decisively breach the key psychological barrier of 120,000 at close but fell short, ending the session at 118,878, reflecting a decline of 813 points. It came due to profit-taking pressure at record levels. On Tuesday, the market soared to an all-time high above 120,000 points as investor optimism grew following the approval of a $800 million loan by the ADB for Pakistan's public finance programme and the government's approval of a Rs880 billion Public Sector Development Programme (PSDP). The benchmark KSE-100 index recorded an increase of 1,573 points and settled at 120,451. The bourse continued its record-breaking run on Wednesday, with the index closing at an all-time high of 121,799, up 1,348 points. Investor sentiment remained upbeat ahead of the federal budget, buoyed by expectations of fiscal relief measures and encouraging macroeconomic indicators. However, the PSX witnessed a volatile session on Thursday, with the benchmark index retreating after hitting record highs a day earlier. Investor sentiment turned cautious due to concerns about stringent conditions linked to a new IMF programme, including the proposed enforcement of agriculture income tax and the IMF's opposition to provincial energy subsidies. The PSX ended the day on a negative note at 121,641, down 158 points. "Building on last week's bullish trend, the market picked up pace, with the KSE-100 reaching an all-time high of 121,798 points on June 4, driven by buying interest across different sectors," Arif Habib Limited (AHL) wrote in its weekly report. Positive sentiment followed Pakistan's successful budget talks with the IMF, alongside the ADB's approval of a $800 million financing package. The government also finalised a Rs1.275 trillion circular debt resolution deal with banks, a significant move for the power sector, AHL said. Meanwhile, during May 2025, petroleum sales rose 10% YoY, inflation came in at 3.5% and the trade deficit narrowed 23% MoM. The State Bank's reserves declined $7 million to $11.5 billion. The market closed at 121,641, depicting a surge of 1,950 points, or 1.63% week-on-week (WoW). Sector-wise, the positive contribution came from commercial banks (1,044 points), power generation and distribution (369 points), fertiliser (206 points), food and personal care products (95 points) and chemicals (60 points). Meanwhile, the sectors that contributed negatively were technology and communication (82 points), automobile assemblers (29 points), miscellaneous (24 points), cable and electrical goods (10 points) and Real Estate Investment Trusts (five points). Scrip-wise, the positive contributors were Pakgen Power (327 points), Bank AL Habib (208 points), NBP (165 points), HBL (160 points) and Fauji Fertiliser Company (158 points). Foreigners' selling was witnessed during the week, which came in at $14.7 million compared to net selling of $5.56 million last week. Average volumes arrived at 660 million shares (-0.2% WoW) while average traded value settled at $98.6 million (up 24.9%), AHL added. Syed Danyal Hussain of JS Global wrote that the KSE-100 index hit an all-time high during the outgoing week, closing at a record level of 121,641 points, up 1.6% WoW. The rally was largely driven by optimism surrounding a potential agreement with the IMF, as indicated by the prime minister, which spurred pre-budget sentiment, he said. The government, following the IMF's endorsement, finalised a Rs1.275 trillion financing agreement with 18 commercial banks to address the power sector's circular debt. On the sectoral front, local cement dispatches rose 9% YoY in May 2025, bringing 11MFY25 volumes to nearly flat levels. Meanwhile, a 26% rise in exports during 11MFY25 lifted total cement sales to a growth of 2%, he added.
