PSX optimism continues amid govt moves to ease circular debt

Published
0
Upward trajectory continues at the Pakistan Stock Exchange on Friday. — PSX data portal
Upward trajectory continues at the Pakistan Stock Exchange on Friday. — PSX data portal

Shares at the Pakistan Stock Exchange (PSX) continued their upward trajectory on Friday as the KSE-100 index gained more than 800 points in intraday trade.

The benchmark KSE-100 index climbed 801.61 points, or 0.7 per cent, to stand at 114,514.78 from the last close of 113,713.17 at 12:06pm.

Finally, the index closed at 114,398.69, up by 685.52 points or 0.6pc, from the previous close.

Yousuf M. Farooq, director research at Chase Securities, said, “The market is upbeat following media reports that the government has convinced banks to lend Rs1.25 trillion at an interest rate of less than 11pc to clear circular debt.”

According to a report by Arif Habib Limited, the government made major strides in resolving the power sector’s circular debt of Rs1.5tr.

“As per the news, Rs1.25tr of the total amount will be financed through new loans from banks, while Rs250 billion is already allocated in the budget,” it said, adding that the government is expected to borrow Rs1.25tr from commercial banks under this plan to resolve circular debt in the power sector.

“The commercial banks lending to the government will be at an interest rate of 0.90pc lower than the Kibor [Karachi Interbank Offered Rate],” it said. “Although the government initially sought a fixed interest rate of 7-8pc, but the agreement was not finalised at the fixed rate.”

Additionally, Farooq noted that declining global oil prices were “reshaping inflation expectations”, which drove optimism in cyclical stocks.

“All eyes are now on the IMF programme, as a smooth review could help the market break out of the consolidation phase it has been in for the past two months,” he added.

Yesterday, the stock market resumed its upward trajectory on intense anticipation of further easing monetary policy, with the benchmark index settling above 113,000.

Analysts had attributed the rally to be primarily driven by a sharp decline in internati­onal oil prices, which plu­nged to multi-year lows, which uplifted investor sentiment.

Moreover, speculation surrounding a high-level meeting on the clearance of the long-standing circular debt further fuelled optimism.

Follow Dawn Business on X, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Equal citizens
Updated 11 Aug, 2026

Equal citizens

Religious minorities continue to face mob violence, attacks on their places of worship, forced conversions and social and economic exclusion.
Tel Aviv’s subterfuge
Updated 11 Aug, 2026

Tel Aviv’s subterfuge

These verbal gymnastics indicate that Tel Aviv has no intention of ending its occupation of the Strip.
Abandoned after floods
11 Aug, 2026

Abandoned after floods

THREE years after the 2022 floods submerged a third of Pakistan, more than 134,000 verified affected families in...
Genuine governance
Updated 10 Aug, 2026

Genuine governance

ON the surface, the Punjab cabinet’s decision to allocate funds for local government elections is a welcome step...
Failed by the state
10 Aug, 2026

Failed by the state

THE 1,914 cases of child abuse across Pakistan in the first six months of 2026 should spark outrage. The figure ...
HIV crisis
10 Aug, 2026

HIV crisis

PAKISTAN’s presence among countries with the fastest-growing HIV epidemic in Asia is a matter of shame. Globally,...