Pakistan's KSE-100 rises 1% to 133,415.60 in provisional close

Pakistan's KSE-100 rises 1% to 133,415.60 in provisional close

The Pakistan Stock Exchange's (PSX) benchmark KSE-100 Index closed at an all-time high of 133,415.60 on July 2, 2025, marking a 1% increase from the previous close of 131,833.56. This provisional close reflects a robust performance driven by multiple factors, including expectations of fresh inflows in the new fiscal year and the easing of default risks.

Ahfaz Mustafa, CEO of Ismail Iqbal Securities, attributed the positive sentiment among investors to the anticipation of new inflows in the upcoming fiscal year [1]. The KSE-100 Index reached an intraday high of 133,822.31, surging by 1,369.52 points, or 1.1%, from the previous close. The index touched a low of 131,500.20, reflecting a rise of 121.14 points, or 0.1%.

China's extension of a rollover and refinancing of $3.4 billion in commercial loans played a crucial role in boosting investor confidence. This package includes a $2.1 billion rollover of funds parked in the State Bank of Pakistan for the past three years, along with a $1.3 billion refinancing of a previously repaid loan. The Chinese support comes as Pakistan emerges as the most improved economy globally in terms of sovereign risk reduction [1].

According to data cited by Adviser to the Finance Minister Khurram Schehzad from Bloomberg Intelligence, Pakistan recorded the sharpest drop in default probability among emerging markets. Its CDS-implied default probability fell from 59% to 47%, an improvement of 1,100 basis points [1]. This development is attributed to "macroeconomic stabilisation, structural reforms, timely repayments, and strengthened IMF engagement," alongside credit outlook upgrades by agencies such as S&P and Fitch [1].

The bullish momentum is also driven by low inflation rates and surging crude oil prices. The KSE-100 Index rose by 60% in the previous fiscal year, according to Karachi-based Topline Securities. The latest milestone builds on a strong showing in the previous fiscal year, when the KSE-100 Index rose by 60% [2].

Investors are optimistic about the upcoming earnings season and macroeconomic signals, with all eyes on these factors to gauge the continued bullish trend. The Pakistani stock market's performance is a sign of growing investor confidence in the economy and government policies, reflecting the country's efforts to consolidate its financial recovery after years of economic turbulence [2].

References:

[1] https://www.thenews.com.pk/latest/1325596-psx-rally-continues-amid-inflow-expectations
[2] https://www.arabnews.com/node/2606673/business-economy