PSX makes history on macro boost
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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.
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Express Tribune
14 hours 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.
Business Recorder
15 hours ago
- Business Recorder
Fixing budget to unleash growth
Every year, Pakistan's federal budget arrives with familiar choreography: a frantic scramble for revenue, a ritualistic promise of belt-tightening, a prayer for donor approval—and, inevitably, a deepening economic funk. The budget, instead of being a strategic tool to unleash growth and build reserves, has become a reactive exercise designed to appease creditors and perpetuate the status quo. This is not just a budgeting problem—it is a full-blown political economy failure. To break this cycle, we must fundamentally reimagine the budget—not as a ledger-balancing ritual, but as the central engine of economic revival through a sustained growth acceleration. Bloated government Pakistan's budget has historically expanded alongside a steady growth in government spending—starting with the welfare and development spree of the Bhutto years. Since then, successive governments have continued to bloat expenditures, expand political patronage networks, and indulge in borrowed vanity projects. Unsurprisingly, the lion's share of the budget is now devoured by a bloated and inefficient government machinery—ministries, SOEs, elite subsidies, and ever-growing civilian and military pensions. Development spending (PSDP) does not fare much better. It is either slashed mid-year or burned on politically motivated brick-and-mortar projects that neither raise productivity nor enhance exports. Numerous studies show that public investment in Pakistan is failing to crowd in private capital, generate jobs, or enhance competitiveness. No surprise, then, that economic growth has been on a steady downward slope this century. Don't tax the economy to death Maintaining the donor mantra that the 'tax-to-GDP ratio is low,' the IMF responds to our fiscal deficits by prescribing more and more taxes. When unrealistic revenue targets fall short, they roll out the usual remedy: 'further taxes,' 'additional taxes,' 'super taxes'—all piled on top of already over-taxed sectors in the infamous minibudget blitzes. The result? A regressive, volatile, and thoroughly anti-growth tax regime. Pakistan's real problem is not just low revenue—it is the structure of revenue—complicated, intrusive, and volatile. The consequence is a skewed, unjust, and investment-suppressing system. As deficits ballooned alongside unchecked political largesse, public debt skyrocketed past the 60 percent of GDP ceiling set by the 2003 Fiscal Responsibility Act—an IMF-sponsored law. Today, over 50 percent of the federal budget is consumed by interest payments. Yet both federal and provincial governments continue spending with abandon. Just in FY2025, they added over 60 new government agencies. Apparently, austerity is for textbooks — not our political class. A good budget To shift the budget toward growth, we must reframe our fiscal strategy around three core objectives: investment facilitation, economic restructuring, and foreign exchange generation. Our fiscal culture is rooted in control. Every economic activity is smothered in paperwork, redundant approvals, and bureaucratic misalignment. The budget must empower cities, universities, and private innovators—not just federal ministries. Local governments have been 'in the pipeline' for decades. While this issue lies beyond the immediate scope of the budget, it is crucial that administrative decentralization and institutional autonomy be pursued with proper performance checks and accountability frameworks. Perhaps the most urgent—and overdue—reform is the restructuring of the Planning Commission and the PSDP. The Haq/HAG model of brick-and-mortar development must evolve into a productivity-enhancing strategy. Let us transform the PSDP into a competitive grants framework—empowering cities and knowledge institutions to innovate, tied to clear outcomes in research, urban regeneration, and enterprise development. Likewise, the Planning Commission should be converted into a genuine reform engine—steering away from bloated plans and abstract visions that no one reads, let alone implements. And yes, this also means an end to discretionary funds and politically captive schemes. Enough random taxation The obsession with squeezing more out of the same tax base is strangling the economy. We need to broaden the base by simplifying, lowering, and stabilizing the tax structure—rather than repeatedly taxing the same goods and sectors into oblivion. As we outlined in the Haque Tax Commission Report of 2024: a) Simplify the tax code and reduce compliance burdens b) Replace withholding and turnover taxes with a value-added tax (VAT) system, with automatic and credible refunds c) Streamline documentation requirements for entering the tax system d) Broaden the base through digitization and administrative ease e) Most importantly, stop the frantic revenue drives that inject volatility, erode confidence, and drive away both domestic and foreign investment A good time to open the economy The relentless thirst for revenue has turned tariffs into a catch-all crutch—even exports now suffer because import duties are raising the cost of globally integrated inputs. Worse still, policy remains trapped in an outdated import-substitution mindset that rewards rent-seeking rather than export excellence. It is time for a bold pivot: abandon import substitution and stop using tariffs as a revenue crutch. Elementary economics teaches that tariffs are used to prevent a needed exchange rate adjustment. Tariffs can never be a competitive strategy. If we are serious about export-led growth—not just sloganeering—we must let the rupee find its true value, open the economy, and dismantle protectionist walls. Make the budget a living, transparent document For two decades, we have had a grand-sounding World Bank project—PIFRA ('Project to Improve Financial Reporting and Auditing')—with nothing to show. We still lack basic budget transparency. Follow the rest of the world and now adopt accrual-based budgeting across Pakistan. Here is a modest proposal for the finance minister: Make PIFRA live for public access this year. Put real-time dashboards online so citizens can trace every rupee spent. Growth is the only way out Our fiscal burden continues to grow as economic growth slows. The only way to break free from perpetual debt, IMF bailouts, and creeping default is through a sustained acceleration of private sector-led growth. This must be the cornerstone of budget policy: raise private investment from today's pitiful 8–9 percent of GDP to over 20 percent in five years. Deregulate. Open up. Simplify taxes and documentation. Build a performance-oriented public sector that enables growth—not one that chases after taxes with a club and spends the money on useless projects, bloated government, and patronage. Copyright Business Recorder, 2025
Business Recorder
15 hours ago
- Business Recorder
Businessman says community optimistic about budget prospects
KARACHI: The Chairman of National Business Group Pakistan, the President of the Pakistan Businessmen and Intellectuals Forum, the President of All Karachi Industrial Alliance, the Chairman of the FPCCI Advisory Board, and the President and former provincial minister, Mian Zahid Hussain, said that the business community has high expectations from the new budget. He said that amid an ongoing economic crisis, high inflation, and widespread unemployment, the public is looking to the government for a budget that offers meaningful relief, enabling the industrial and trade sectors to move toward stability, ease of doing business, and growth. He said that the private sector seeks a budget that promotes investment, lowers production costs, broadens the tax base, boosts exports, eliminates the trade deficit, and helps the economy function at full strength. At the same time, an increase in the defence budget is essential. Concrete measures must also be introduced to promote austerity, control unnecessary spending, and curb corruption. Mian Zahid Hussain said the Pakistani economy has been under pressure for several years. While measures taken under IMF conditions helped Pakistan avoid default, they also burdened the population with unemployment and inflation. Given these circumstances, the new budget must combine public relief with structural economic reforms. He added that unnecessary subsidies should be eliminated, tax exemptions must be reviewed, government expenditures must be curtailed, and failing state-owned enterprises should be privatized. Mian Zahid Hussain emphasized that agriculture, IT, exports, and the SME sector must be prioritized for support so that they can generate jobs and strengthen the economy. Operationalizing special economic zones, ensuring uninterrupted and affordable energy supply, and improving infrastructure should also be priorities. He further stated that the budget should not be viewed merely as a tool for increasing revenue but rather as a means of promoting public welfare, industrial progress, and poverty reduction. Without a sustainable economic vision and a clear roadmap, temporary steps will yield no long-term benefits. He emphasized that the people of Pakistan have already made many sacrifices, and the time has come to offer them relief. If the government presents a well-directed and thoughtful budget, it will not only contribute to economic stability but will also help restore public confidence and bring political stability. Mian Zahid Hussain underscored the need for national consensus, wisdom, and foresight to steer the economy forward. All this is possible through a balanced, comprehensive, and people-friendly budget. He concluded by saying that if economic policies are continued without disruption, an investor-friendly environment is created, undue pressure on industrialists is alleviated, and the tax system is simplified and made fair, both domestic and foreign investment will increase. Taxpayers should be respected, and non-filers should be encouraged to bring themselves into the legal framework. Copyright Business Recorder, 2025
