Karachi: The KSE-100 index saw a substantial gain of 2,787 points, closing at 114,114 with a trading volume of 371 million shares, signaling renewed investor confidence amidst a backdrop of escalating geopolitical tensions and economic adjustments in Pakistan.
Top performers in the stock market included POML, AICL, and PGLC, while AGP, PAKT, and IBFL faced declines. The trading activity was primarily concentrated in the Cement, Oil Marketing Companies (OMCs), and Banking sectors.
In a significant geopolitical move, Pakistan banned all Indian-flagged vessels from its ports, a decision reflecting the heightening tensions between the two neighboring nations. Concurrently, Pakistan has called for an emergency United Nations Security Council meeting to address what it perceives as Indian aggression.
Despite objections from India, the International Monetary Fund (IMF) is set to proceed with its review of Pakistan's economic situation. These tensions are likely to influence the State Bank of Pakistan's (SBP) upcoming monetary policy decision. Industrialists are advocating for a rate cut ahead of the Monetary Policy Committee (MPC) meeting, a sentiment echoed by the Overseas Investors Chamber of Commerce and Industry (OICCI) in discussions with Aurangzeb.
On the economic front, Pakistan's tax-to-GDP ratio is projected to reach 10.6% by June, while the trade deficit has widened to $3.4 billion. Inflation has dipped to a six-decade low of 0.3%, despite a 0.15% weekly increase in the Sensitive Price Index (SPI). Meanwhile, exports from July to April increased by 6.25% year-on-year, totaling $26.859 billion, though April saw an 8.9% decline amid a slowing growth trend.
The government plans to set a revenue target of Rs14.3 trillion for the fiscal year 2025-26, which includes Rs500 billion in new taxes. The State Bank of Pakistan's reserves have increased by $9 million, and the Petroleum Division has proposed the reconstitution of a body overseeing LNG imports.
In the energy sector, OPEC+ has agreed to accelerate the oil output hike in June, and Pakistan's petroleum sales have jumped by 32% year-on-year. Meanwhile, delays in Punjab's solar subsidy scheme have disappointed 450,000 farmers.
The All Pakistan Cement Manufacturers Association (APCMA) is advocating for industry-friendly measures in the upcoming budget as cement sales have risen in April. Additionally, BYD Pakistan has entered a partnership with HGL to develop a DC fast charging network.
Amid these developments, S and P has advised Pakistan to maintain its current course while accelerating reforms, as the country seeks to stabilize its economy and navigate the complex geopolitical landscape.