The Pakistan Stock Exchange (PSX) continued its upward trajectory on Tuesday, with the benchmark KSE-100 Index climbing to an all-time high of 143,037.16 points. This rally, representing a gain of 0.69%, was fueled by investor optimism regarding the cement sector and recent headway on power sector circular debt reforms.
During the session, the index reached an intraday high of 143,059.81, showing strong bullish momentum. According to Topline Securities CEO Mohammad Sohail, the market is rising in anticipation of better-than-expected results from cement companies. AAH Soomro, an independent investment analyst, added that the market’s bullish trend is also supported by expected improvements in the E&P sector due to liquidity easing and robust sales growth in the cement industry, noting that there is “aplenty” of liquidity chasing stocks.
Government Reports Circular Debt Reduction and Improved Fiscal Health
The government has announced a significant reduction in power sector circular debt by Rs780 billion, bringing the total down to Rs1.614 trillion. The Power Division credited this decline to lower line losses, enhanced bill recovery, and cost savings from renegotiated IPP contracts. However, some industrialists remain cautious, warning that this relief could be temporary as the government continues to secure bank loans to clear arrears.
In a related development, Oil and Gas Development Company Ltd (OGDCL) confirmed receiving a Rs7.7 billion interest payment from Power Holding Private Ltd (PHPL). This payment is part of a larger Rs132.7 billion settlement involving term finance certificates issued in 2013, with the outstanding balance now reduced to Rs84.3 billion.
On the fiscal front, new data from the Ministry of Finance indicates that Pakistan’s consolidated budget deficit for FY25 improved to Rs6.17 trillion, or 5.4% of GDP, a notable improvement from the previous year’s 6.8%. Total revenues surged by 36% year-on-year to Rs17.997 trillion, while total expenditure grew by 18% to Rs24.166 trillion. The primary surplus also improved significantly to Rs2.719 trillion, or 2.4% of GDP, compared to Rs953 billion in FY24. Tax and non-tax revenues saw substantial increases of 26% and 66%, respectively, while development expenditure also jumped by 43%.
