PSX closes at record high as circular debt reforms lift sentiment

KARACHI: The Pakistan Stock Exchange (PSX)’s benchmark KSE-100 Index closed at an all-time high on Monday, supported by improved liquidity and strong investor confidence.

The index surged 1,904 points intraday before settling at 148,196 — up 1,704 points, or 1.16 per cent — marking record intraday and closing highs.

Market sentiment strengthened on reports of the government’s circular debt reform drive, which includes cutting LNG cargoes, revising RLNG pricing, and mobilising funds through LNG diversion savings, SOE dividends and power sector receivables. Detailed proposals are expected next week, sustaining optimism, according to Topline Securities.

“Stocks closed at a record high as investors weighed Fitch’s brighter outlook on Pakistan’s banks and Moody’s currency ratings upgrade to Caa1,” said Ahsan Mehanti, CEO of Arif Habib Commodities.

He added that a strong earnings outlook, rupee stability, speculation over Pakistan-US trade and investment deals, and possible US export tariff incentives also drove sentiment.

Commercial banks, cement, and oil and gas exploration companies were the biggest contributors, adding a combined 1,268 points to the index, according to Ismail Iqbal Securities. Heavyweights LUCK, MEBL, BAHL, and PPL together contributed 756 points.

Investor activity remained robust, with total traded volume rising to 602 million shares, generating a turnover of Rs38.9 billion. WTL led the volumes chart with 39.3 million shares traded.

Earlier, the government announced a new debt management plan that seeks to reduce risks from exchange rate fluctuations and ease pressure on short-term borrowing.

The plan, called the Medium-Term Debt Management Strategy (MTDS) for fiscal years 2026 to 2028, was released by the Debt Management Office of the Finance Division.

Focus on growth and fiscal discipline

According to the report, Pakistan’s nominal GDP is expected to rise from Rs114.7 trillion in fiscal year 2025 to Rs162.5 trillion by fiscal year 2028. This growth will largely be driven by agriculture and manufacturing.

Fiscal reforms are also projected to deliver an average primary surplus of about one percent of GDP, in line with commitments under the IMF programme.

The government said it remains committed to actively managing foreign exchange risks. It is also exploring innovative tools such as debt-for-nature swaps to handle external obligations while reducing vulnerabilities.