The capital market opened the week on Monday with mixed feelings as investors navigated between optimism about improving economic indicators and concerns about possible policy measures.
In early trade, the Pakistan Stock Exchange (PSX) benchmark KSE-100 index rose 1,148.11 points, or 0.98%, to an intraday high of 118,735.09. However, profit-taking and cautious sentiment later in the session dragged the index to a low of 115,941.94, a drop of 1,645.04 points or -1.4%.
Market pressures arose following reports of a possible increase in the price of gas. Ahfaz Mustafa, CEO of Ismail Iqbal Securities, said: “The market is under pressure at midday due to reports of rising gas price.”
“The IMF has asked Pakistan to increase captive gas prices for industries which can potentially affect the balance sheets of all gas-related utilities and industries in general,” he added.
The proposed tax on gas supply to industrial captive power plants (CPPs) is part of the IMF’s structural benchmarks under the $7 billion Expanded Fund Facility (EFS). Compliance with these measures is essential for Pakistan to get the next tranche of $1 billion in March.
According to sources, Pakistan will receive a loan of $20 billion from the World Bank over the next decade under the National Partnership Framework 2025-2035. This funding aims to improve sustainable economic development in key sectors.
The loan program, pending approval on January 14, aligns with the government’s National Economic Transformation Plan, which aims for ambitious economic goals, including doubling GDP growth and halving poverty in five years.
On the inflation front, short-term inflation, as measured by the Sensitive Price Indicator (SPI), showed a marginal weekly decline of 0.26% during the week ending January 2, 2025, while inflation year-on-year for the same week registered an increase of 3.97%.
Meanwhile, textile exports during the first half of FY25 rose 10% year-on-year to $9.9 billion, reflecting the resilience of one of the country’s key sectors.
The PSX KSE-100 index demonstrated positive momentum on Friday, hitting an intraday high of 117,891.62 before closing at 117,586.98, an increase of 467.33 points or 0.4% from the previous session close .
