The capital market continued its bullish momentum on Thursday, driven by surging investor confidence following reports of the International Monetary Fund’s (IMF) conditional approval of the government’s circular debt management plan.
The rally was further amplified by discussions on the privatisation of state-owned enterprises (SOEs) and mounting anticipation of a reduction in industrial power tariffs.
Prime Minister Shehbaz Sharif expressed satisfaction over the PSX reaching 119,000 points for the first time in history. He viewed the positive business trend as a reflection of increasing confidence among traders and investors in the government’s policies.
The PM attributed the improvement in economic indicators and the overall business environment to the government’s economic policies over the past year. He further said that the government is prioritising providing a conducive environment for business and investment.
Meanwhile, Ahfaz Mustafa, CEO of Ismail Iqbal Securities, said: “The market made a new high, causing technical players to initiate new long positions. This, coupled with the IMF news and circular debt resolution discussions, is giving investors renewed confidence.”
Investor sentiment remained upbeat following reports that the IMF had approved Pakistan’s request to borrow Rs1.25 trillion ($4.5 billion) from domestic banks to reduce circular debt without adding to the country’s official public debt stock.
The development provided a fresh catalyst for institutional and retail buying, particularly in blue-chip stocks, pushing the market to record levels.
The bullish trend was further supported by the government’s Rs392 billion raised through the auction of market Treasury Bills on Wednesday. However, this fell short of the Rs800 billion target and was lower than the Rs513 billion maturity amount.
According to the State Bank of Pakistan (SBP), the cut-off yields on Treasury bills largely remained stable except for the 12-month paper, which saw a slight increase of 26 basis points (bps) to 11.8999%.
The yield on the one-month Treasury bill stood at 12.0498%, while the three-month paper remained unchanged at 11.8242%. The six-month T-bill closed steady at 11.6699%.
The stock market has now posted gains for five consecutive sessions, with the bullish rally led by energy and banking stocks.