KARACHI, MAR 17 (DNA):The bourse opened the week on a bullish note, continuing its upward momentum as investor sentiment was buoyed by progress in negotiations between Pakistani authorities and the International Monetary Fund (IMF), along with renewed optimism surrounding the resolution of circular debt in the energy sector.
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index gained 663.43 points, or 0.57%, to close at 116,199.59, up from the previous close of 115,536.16.
The index reached an intraday high of 116,597.89, while the lowest level recorded during the session was 115,883.22. Analysts linked the rally to two primary factors — developments regarding the IMF loan programme and ongoing discussions on tackling circular debt.
“One reason is mainly the development regarding the IMF, particularly the significant progress observed in the Staff Level Agreement (SLA). Secondly, the ongoing news about circular debt, which has been circulating for the past few weeks. These are the two primary reasons driving the market,” said Sana Tawfik, Head of Research at Arif Habib Limited.
The IMF and Pakistani authorities reported major progress over the weekend in reaching a staff-level agreement on the first review of Pakistan’s $7 billion programme. According to IMF Mission Chief Nathan Porter, policy discussions will continue via video conference in the coming days to finalise the agreement.
If the IMF signs off on the review, Pakistan is expected to receive approximately $1 billion as the next tranche of the bailout package, a move seen as crucial in stabilising the country’s external finances.
Meanwhile, efforts to manage the energy sector’s circular debt continued to gain attention. The Ministry of Energy’s Power Division informed the National Assembly last week that the circular debt had decreased by Rs9 billion during the first half of the fiscal year, falling from Rs2,393 billion in June 2024 to Rs2,384 billion by December 2024. The government attributed this decline to ongoing reforms and financial restructuring.
Despite this progress, concerns remain as authorities explore a Rs1.2 trillion borrowing plan from commercial banks to tackle circular debt. The IMF has raised objections to this approach, questioning how the Central Power Purchasing Agency (CPPA) would finance both interest and principal repayments if electricity demand declines in the coming years.
The PSX ended the previous week on a positive note, with the KSE-100 index gaining 442 points on Friday, closing at 115,536.16, up from 115,094.24 in the last session.
Throughout the week ending March 14, 2025, the benchmark index posted a net gain of 1,137 points, or 1% week-on-week.
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