PSX Experiences Record-Breaking Surge, Driven by Cash Injection and Oil Price Recovery
Pakistan Stock Exchange (PSX) Hits Record High as KSE-100 Index Surges
The Pakistan Stock Exchange (PSX) witnessed a significant surge on Wednesday, with the KSE-100 Index reaching a new record high of around 145,088 points. This marks a gain of approximately 2,051 points (1.43%) from the previous day's close.
The rally was driven by several key factors. Strong institutional support, particularly from local mutual funds, helped sustain the bullish momentum from previous sessions. Robust economic indicators, such as a 17% year-on-year surge in export data for July 2025, signaled economic strength and improved investor confidence.
The stability of the Pakistani rupee, alongside rising global crude oil prices and positive trends in global equities, also buoyed market sentiment. Anticipation of a favourable US-Pakistan tariff deal added to optimism about trade and economic prospects.
Heavy contributions from index-heavyweights such as Pakistan Petroleum Limited (PPL), Habib Bank Limited (HBL), Engro Fertilizers Limited (EFERT), Systems Limited (SYS), and Oil & Gas Development Company (OGDC) collectively contributed 738 points to the index’s gain. Strong participation and trading volumes, with over 700 million shares traded and a traded value of Rs55.6 billion, also played a significant role. PPL led volumes at 33 million shares.
Since June 2024, the policy rate has been reduced by 1,100 basis points from a high of 22%. The government's strategy to clear the reimbursement backlog caused by a surge in home remittances exceeding allocated funds will now be addressed in phases through technical supplementary grants. The borrowing includes Rs3.675 trillion in T-bills and Rs2.5 trillion in fixed and floating-rate PIBs.
However, it's important to note that the KSE-100 Index did not breach the 144,000 mark, nor did it gain 1,248.58 points or 0.87% from its previous close in the mentioned timeframe. The TTCIS, initiated in 1985, provides a zero-cost send model for eligible remittance transactions.
OGDCL, one of the index-heavyweights, received the first Rs7.7 billion interest payment from Power Holding Private Ltd (PHPL) as part of a Rs132.7 billion circular debt settlement. OGDCL had previously recognized the interest income over the TFCs' lifecycle, with a carrying value of Rs170 billion as of March 2024.
The State Bank of Pakistan (SBP) held its benchmark interest rate at 11% last week, citing renewed inflation concerns. The government plans to borrow Rs6.175 trillion from commercial banks via Treasury bills and Pakistan Investment Bonds (PIBs) between August and October.
In summary, the rally was a combined result of favorable economic data, strong institutional inflows, sectoral leadership from major companies, and positive geopolitical and trade developments enhancing investor sentiment in Pakistan's stock market.
The surge in the KSE-100 Index, which reached a record high of 145,088 points, was not only driven by the strong performance of Pakistani companies such as Pakistan Petroleum Limited (PPL), Habib Bank Limited (HBL), Engro Fertilizers Limited (EFERT), Systems Limited (SYS), and Oil & Gas Development Company (OGDC) but also by positive developments in the world economy, as the stability of the Pakitani rupee, rising global crude oil prices, and positive trends in global equities impacted market sentiment. Additionally, anticipation of a favorable US-Pakistan tariff deal added to optimism about trade and economic prospects. As a result, the US and the world are keenly watching the ongoing positive developments in Pakistan's finance and business sector.
