PSX rises modestly amid delay in budget
Listen to article
The Pakistan Stock Exchange (PSX) witnessed a volatile trading week as investors remained cautious ahead of the FY26 budget announcement, now rescheduled for June 10, 2025, amid ongoing IMF negotiations.
Despite initial uncertainty, the KSE-100 index managed to post a modest weekly gain of 0.49%, closing at 119,691 points, supported by positive developments on the economic front including China's pledge to refinance $3.7 billion in commercial loans and a successful T-bill auction that raised Rs772 billion. However, foreign investors continued to offload their positions, with net outflows of $5.65 million, while local participants stepped in to absorb the selling pressure.
On a day-on-day basis, the PSX started the week on a bearish note on Monday as the KSE-100 index fell 882 points, or 0.74%, settling at 118,221 over investor caution ahead of the federal budget and the delay in IMF's approval of circular debt settlement plan.
On Tuesday, the market closed modestly higher with a gain of 112 points as the index oscillated in a narrow band throughout the day. Investors were wary ahead of the budget presentation, although cement stocks rose, driven by hopes for announcement of a real estate package. The bourse opened with renewed vigour on Thursday following a day's closure to mark Youm-e-Takbeer, which reflected the nation's nuclear achievements. The KSE-100 posted a notable rise of 638 points.
Finally, the PSX closed the week on a bullish note on Friday, lifted by strong gains in blue-chip oil, banking and fertiliser stocks amid growing optimism about the upcoming budget measures. The index surged 720 points and settled at 119,691.
Arif Habib Limited (AHL) wrote that the KSE-100 index displayed mixed trends throughout the week, beginning on a negative note due to uncertainties surrounding the budget rollout. On the economic front, China committed to refinancing $3.7 billion of commercial loans for Pakistan.
Moreover, Nepra approved K-Electric's multi-year tariff at Rs39.9/unit and a 14% USD-based return on equity. The government successfully raised Rs772 billion through a T-bill auction, exceeding its target of Rs650 billion. Cut-off yields declined across all tenors, falling by 9 to 15 basis points (bps). The State Bank's reserves climbed up by $70 million to $11.5 billion. The market closed at 119,691, depicting a rise of 588 points, or 0.49% week-on-week (WoW), AHL said.
Sector-wise, the positive contribution came from cement (317 points), fertiliser (249 points), power generation and distribution (148 points), commercial banks (84 points) and refinery (80 points). Meanwhile, the sectors that contributed negatively were automobile assembler (105 points), oil and gas exploration companies (97 points), technology and communication (53 points), food and personal care (46 points) and oil and gas marketing companies (43 points).
Scrip-wise, the positive contributors were Meezan Bank (230 points), Fauji Fertiliser Company (210 points), Lucky Cement (159 points), Pakgen Power (80 points) and DG Khan Cement (70 points). Average volumes arrived at 662 million shares (up 34.6% WoW) while average traded value settled at $78.9 million (down 6.5%), AHL added.
"The KSE-100 index recovered during the week, closing at 119,691 points (up 0.5% WoW)," said Syed Danyal Hussain of JS Research. Foreign investors remained net sellers during the week, with an outflow of $5.57 billion, which was offset by local buying.
The week commenced with the IMF concluding its visit to Pakistan without reaching an agreement on certain budget items, leading the government to reschedule the budget presentation to June 10, 2025, he said. Virtual negotiations were continuing, with both sides focusing on measures to enhance tax revenues and curtail expenditures. Meanwhile, Hussain added, China reaffirmed its commitment to refinancing $3.7 billion in commercial loans denominated in renminbi before the end of June. In other news, the State Bank's net buying from currency markets reached $223 million in February 2025 to further strengthen foreign exchange reserves, bringing the cumulative purchases to $5.9 billion during 8MFY25.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
35 minutes ago
- Business Recorder
Buying spree at PSX continues, KSE-100 crosses 121,000
Buying rally continued at the Pakistan Stock Exchange (PSX) amid reports that talks with the International Monetary Fund (IMF) over the incoming federal budget had been successful, with the benchmark KSE-100 Index gaining over 500 points during the opening hours of trading on Wednesday. At 9:40am, the benchmark index was hovering at 121,022.36 level, a gain of 571.49 points or 0.47%. Positive momentum was observed in key sectors including automobile assemblers, commercial banks, fertiliser, oil and gas exploration companies and OMCs. Index-heavy stocks, including MARI, OGDC, PPL, POL, SNGPL, SSGC, HBL, and NBP, traded in the green. On Tuesday, PSX closed at a new all-time high level, driven by positive expectations from the upcoming budget and news of the Asian Development Bank's (ADB) approval of $800 million for Pakistan. The benchmark KSE-100 Index jumped 1,573.07 points or 1.32% to close at 120,451 points, crossing the 120,000-point mark for the first time on a closing basis. Internationally, Asian stocks inched higher on Wednesday and the dollar wobbled near six-week lows as traders braced for higher US duties on steel and aluminium, the latest chapter in the trade war saga that has rattled the markets for much of the year. South Korea's stocks and its currency surged as liberal presidential candidate Lee Jae-myung's election victory raised hopes of swift economic stimulus, market reforms and easing policy uncertainty. The benchmark KOSP jumped more than 2% to its highest since August 2024. That left the MSCI's broadest index of Asia-Pacific shares outside Japan 0.6% higher. Japan's Nikkei rose 0.8%, while Taiwan stocks jumped 1.6% after artificial intelligence behemoth Nvidia boosted US stocks overnight. Data on Wednesday showed US job openings increased in April, but layoffs picked up, indicating a slowing labour market as tariffs impact the economic outlook. Investor attention has been on a possible call between US President Donald Trump and Chinese leader Xi Jinping sometime this week as tensions between the world's top two economies simmer. Trump on Friday accused China of violating a Geneva agreement to roll back tariffs and trade restrictions. This is an intra-day update
Business Recorder
3 hours ago
- Business Recorder
South Korea's new president Lee Jae-myung vows economic revival, judgment on martial law
SEOUL: South Korea's new liberal President Lee Jae-myung began his term on Wednesday, vowing to raise the country from the turmoil of a martial law crisis and revive an economy reeling from slowing growth and the threat of global protectionism. Lee's decisive victory in Tuesday's snap election stands to usher in a sea change in Asia's fourth-largest economy, after backlash against a botched attempt at military rule brought down Yoon Suk Yeol just three years into his troubled presidency. He faces what could be the most daunting set of challenges for a South Korean leader in nearly three decades, ranging from healing a country deeply scarred by the martial law attempt to tackling unpredictable protectionist moves by the United States, a major trading partner and a security ally. With 100% of the ballots counted, Lee won 49.42% of the nearly 35 million votes cast while conservative rival Kim Moon-soo took 41.15% in the polls that brought the highest turnout for a presidential election since 1997, according to National Election Commission data. The 61-year-old former human rights lawyer called Tuesday's election 'judgment day' against Yoon's martial law and his People Power Party's failure to stop the ill-fated move. 'The first mission is to decisively overcome insurrection and to ensure there will never be another military coup with guns and swords turned against the people,' Lee said in a victory speech outside parliament. 'We can overcome this temporary difficulty with the combined strength of our people, who have great capabilities,' he said. Lee was officially confirmed as president by the National Election Commission on Wednesday and immediately assumed the powers of the presidency and commander in chief. An abbreviated inauguration is planned at parliament at 11 a.m. (0200 GMT), an Interior Ministry official said. Lee has said he would address urgent economic challenges facing the country on the first day in office with a focus on the cost-of-living concerns affecting middle and low-income families and the struggles of small business owners. He also faces a deadline set by the White House on negotiating import duties that Washington has blamed for a large trade imbalance between the countries. 'Deal with Trump' The government under a caretaker acting president had made little progress in trying to assuage crushing tariffs announced by U.S. President Donald Trump's administration that would hit some of the country's major industries, including autos and steel. South Korea's presidential election set to reshape policies for key U.S. ally 'President Lee will find himself with little to no time to spare before tackling the most important task of his early presidency: reaching a deal with Trump,' the Washington-based Center for Strategic and International Studies said in an analysis. U.S. Secretary of State Marco Rubio congratulated Lee on his election win and said the countries 'share an ironclad commitment to the Alliance grounded in our Mutual Defense Treaty, shared values, and deep economic ties.' He also said that the countries were 'modernising the Alliance to meet the demands of today's strategic environment and address new economic challenges.' The White House said the election of Lee was 'free and fair' but the United States remained concerned and opposed to Chinese interference and influence in democracies around the world, according to a White House official. Lee has expressed more conciliatory plans for ties with China and North Korea, in particular singling out the importance of China as a major trading partner while indicating reluctance to take a firm stance on security tensions in the Taiwan strait. Still, Lee has pledged to continue Yoon's engagement with Japan and said the alliance with the United States is the backbone of South Korea's global diplomacy. The martial law decree and the six months of ensuing turmoil, which saw three different acting presidents and multiple criminal insurrection trials for Yoon and several top officials, marked a stunning political self-destruction for the former leader and a drag on an economy already slowing growth.
Express Tribune
3 hours ago
- Express Tribune
ADB snubs India to approve Pakistan loan
Listen to article The Asian Development Bank (ADB) on Tuesday approved an $800 million financing package for Pakistan to enhance tax collection and provide guarantees for securing foreign commercial loans by rejecting Indian objections. The Manila-based lender protected its neutrality by refusing to allow the use of the platform for settling political score by India. The ADB was under pressure from India not to approve the financing package but Pakistan being the founding member has all the rights to secure loans by fulfilling the agreed conditions. The ADB's local office announced on Tuesday that the lender approved an $800 million programme to strengthen fiscal sustainability and improve public financial management in Pakistan. The lender stated that the $300 million loan was approved for the Improved Resource Mobilisation and Utilisation Reform Programme and the first-ever policy-based guarantee of up to $500 million had also been approved, which was expected to mobilise financing of up to $1 billion from commercial banks. It was the second time in the past three weeks that India failed to block Pakistan's external loans, first in the International Monetary Fund (IMF) and then in the ADB. The Indian executive director tried to block the funding on political grounds. The Pakistani executive director apprised the board that India was financing terrorism in Balochistan and Khyber Pakhtunkhwa, according to the Pakistani authorities. The development came after India had earlier managed to postpone the approval of the $800 million financing package by the ADB for Pakistan for five days by exploiting a lacuna in the rules. The Pakistani authorities said that the Indian executive director raised the issues of high indebtedness of Pakistan and alleged that the money could be used for other than the stated purposes. The Pakistani executive director replied that India's debt was unsustainable compared to Pakistan. The Indian debt-to-GDP was 80.4% of GDP compared to Pakistan's 73.6%, according to the IMF's data. The Pakistani executive director apprised the board that India was fuelling terrorism in Pakistan by providing funding to the terrorists in Balochistan and Khyber-Pakhtunkhwa (K-P). On the point of using the ADB's funding for other than intended purposes, the board was apprised that raising such questions was tantamount to pointing fingers at the lender's financial management and showed lack of trust. The board was informed that Pakistan had necessary means and resources to protect its national integrity and it had proven it during the four-day war last month. Pakistan downed six Indian jet fighters, including Rafaels, during the conflict. The Indian chief of defence staff admitted last week that Pakistan did shoot down Indian jets but he did not disclose the number and the name of the planes. The ADB board was also apprised that Kashmiris were fighting for their right to self-determination and India should not blame Pakistan. Prime Minister's Narendra Modi's war hysteria has brought over seven-decade old unresolved issue of Kashmir into the global political and economic discourse. However, Pakistan needs to put its economic house in order by minimising reliance on foreign lenders and consultants. Many Indians work in these multilateral institutions. There is now a high time that the government should reduce its reliance on the foreign loans, particularly on budget support loans. The ADB's $800 million package is not meant for any development purposes and the money and guarantees will be used to build the foreign exchange reserves. The government had reached an understanding with two foreign commercial banks for a $1 billion loan on the back of the ADB's guarantees due to its low credit rating. The final term sheet and loan disbursement are subjected to the approval of the ADB's $500 million guarantee. Pakistan's gross reserves stand at $11.5 billion, which the government wants to increase to over $14 billion by the end of June. The ADB will charge a nominal upfront fee for giving the guarantee. Despite a recent rating upgrade, Pakistan's credit rating still remains low at B-Negative, which is two notches below the investment grade. Fitch upgraded Pakistan from a substantial default risk to a high risk of default rating. The ADB's $300 million policy loan is the second tranche under the Resource Mobilisation Programme, which the government wants to take for improving the tax collection by the Federal Board of Revenue (FBR). Pakistan had met all the prior conditions for securing the second loan tranche from the ADB. "Pakistan has made significant progress in improving macroeconomic conditions," said ADB Country Director for Pakistan Emma Fan. She added that the new $300 million programme backed the government's commitment to further policy and institutional reforms that would strengthen public finances and promote sustainable growth. "The programme supports far-reaching reforms to improve tax policy, administration, and compliance, while enhancing public expenditure and cash management," stated the ADB. "It also promotes digitalisation, investment facilitation, and private sector development," it added. These measures aim to reduce Pakistan's fiscal deficit and public debt, while creating space for social and development spending. The ADB said that the new programme is underpinned by a comprehensive support package — including technical assistance and close coordination with development partnersdesigned to help Pakistan build long-term fiscal resilience and stability.
