Karachi: The KSE-100 index experienced a substantial increase of 1,348 points, closing at 121,799 with a significant trading volume of 710 million shares. Key performers included FABL, NBP, and PKGP, while NATF, HMB, and ISL saw declines. Trading activity was primarily concentrated in the banking, food, and oil marketing sectors.
As Pakistan's economic landscape evolves, the International Monetary Fund (IMF) is calling for strict compliance as the budget process nears completion. Meanwhile, development projects are progressing at both federal and provincial levels.
In trade developments, Pakistan's trade deficit narrowed by 23% month-on-month in May. However, the annual comparison shows an expansion in the deficit. Amid ongoing discussions with the IMF, the government is aiming to sell 7,000 megawatts of power to the industrial and agricultural sectors at a rate of seven cents per unit.
Public debt has risen to Rs74.9 trillion as the fiscal year 2026 budget approaches. In a related development, Pakistan has signed a $300 million 'Subprogram II' loan with the Asian Development Bank.
Despite attempts to enhance trade with neighboring countries, the State Bank of Pakistan indicates that trade with Iran and Afghanistan will remain challenging without necessary waivers. Additionally, the gas sector's circular debt has soared to Rs2,800 billion, raising concerns among government officials.
The agricultural sector is under strain, with farmers facing a Rs2.2 trillion loss in wheat alone. The manufacturing sector is also experiencing difficulties, with the purchasing managers' index falling due to geopolitical unrest and supply chain disruptions.
Textile industry leaders are calling for the continuation of the original Export Financing Scheme (EFS), seeking an 18% GST exemption on yarn and fabric. Concerns have been raised that sales tax impositions under the EFS could harm the export industry. The telecom sector is also lobbying for a reduction in sales tax on services.
In other economic news, the illicit cigarette market has grown to overtake the formal sector, now comprising 58% of the market. Jam Kamal has launched a new pharmaceutical export council, while the government has decided to reduce the IT development budget.
KAPCO has signed a Tripartite Power Purchase Agreement with CPPA-G and NGCPL. In business developments, Pakistan's Big Bird Foods has entered into a strategic partnership with the Alibaba Group, and the National Bank of Pakistan has exceeded Rs100 billion in financing.