The Pakistan Stock Exchange (PSX) started the week on a strong note. Investor confidence soared due to progress in negotiations between Pakistan and the International Monetary Fund (IMF). Optimism over the resolution of circular debt in the energy sector also fueled market gains.
The KSE-100 Index climbed 663.43 points, or 0.57%, closing at 116,199.59. This was a jump from the previous session’s close of 115,536.16. During the session, the index touched an intraday high of 116,597.89, while the lowest recorded level was 115,883.22.
Key Drivers of Market Rally
Analysts linked the rally to two primary factors: progress in the IMF loan program and ongoing discussions on circular debt.
“One reason is the significant progress in the Staff-Level Agreement (SLA) with the IMF,” said Sana Tawfik, Head of Research at Arif Habib Limited. “The second major driver is the ongoing discussions on circular debt, which have been making headlines for weeks.”
Over the weekend, the IMF and Pakistani authorities made major progress on the first review of Pakistan’s $7 billion loan program. According to IMF Mission Chief Nathan Porter, policy discussions will continue via video conference to finalize the agreement.
If approved, Pakistan will receive approximately $1 billion as the next tranche of the bailout package. This development is crucial for stabilizing the country’s external finances.
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Circular Debt and Economic Challenges
Efforts to address the circular debt crisis have also gained attention. The Ministry of Energy’s Power Division reported a Rs9 billion reduction in circular debt during the first half of the fiscal year. The debt dropped from Rs2,393 billion in June 2024 to Rs2,384 billion by December 2024. The government credited financial restructuring and reforms for this decline.
However, concerns remain over a proposed Rs1.2 trillion borrowing plan from commercial banks to manage circular debt. The IMF has raised objections, questioning how the Central Power Purchasing Agency (CPPA) would finance repayments if electricity demand falls in the coming years.
Strong Market Performance
The PSX ended the previous week on a positive note. On Friday, the KSE-100 Index gained 442 points, closing at 115,536.16. Throughout the week ending March 14, 2025, the index posted a net gain of 1,137 points, marking a 1% increase on a week-on-week basis.
Market participants remain optimistic about further gains. The continuation of IMF negotiations and progress on circular debt reforms are expected to influence market trends in the coming days. Investors are closely watching PSX developments, hoping for further stability and growth.
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