KARACHI: PSX breaks record as the KSE-100 index reaches 162,257 points on Monday, August 25, 2025, at 4:35 PM. Geopolitical development with the US and Saudi Arabia drives the 2.7 per cent weekly gain. A PKR 1.225 trillion bank financing settles power sector circular debt. Trading volume climbs to 2.2 billion shares.
This PSX KSE-100 milestone signals broader recovery in South Asia’s volatile markets. It counters slowdowns in India and Bangladesh, drawing Gulf investments worth USD 5 billion and easing remittance pressures amid regional conflicts.
PSX KSE-100 Milestone: Geopolitical Development Fuels Rally
The PSX KSE-100 index crosses 162,000 for the first time. It gains 4,220 points over the week. Average daily volume hits 1.67 billion shares. Traded value averages PKR 60 billion.
Prime Minister Shehbaz Sharif meets US President Donald Trump on August 23 at the White House. Talks cover economic ties and critical minerals. A US delegation signs memoranda on rare earth elements. These steps ease earlier PSX KSE-100 strains from Middle East tensions.
A strategic defence pact with Saudi Arabia adds momentum. Signed during Sharif’s visit, it boosts trade and aid. Foreign reserves rise USD 58 million to USD 19.79 billion. State Bank of Pakistan holds USD 14.38 billion. The rupee strengthens 0.03 per cent to PKR 281.37 per dollar.
Arif Habib Ltd reports the forward price-to-earnings ratio at 8.52 times for 2026. This nears the 15-year average of 8.59 times. Dividend yield stands at 6.2 per cent, above norms.
Pakistan Stock Market Economic Surge: Circular Debt Deal Unlocks Gains
The Pakistan stock market economic surge stems from a PKR 1.225 trillion facility. Eighteen banks sign the deal. It targets power sector circular debt at PKR 1.6 trillion as of July 25. This drops from PKR 2.3 trillion last year, though up PKR 47 billion year-to-date.
Finance Minister Muhammad Aurangzeb hails it as the largest financing in history. “This financing marks a structural shift in energy viability,” he states. The facility includes PKR 660 billion in loan restructuring and PKR 565 billion fresh funds. It releases PKR 660 billion in sovereign guarantees for sectors like agriculture and SMEs. Aurangzeb adds the deal creates a win-win situation. It supports circular debt resolution without new consumer burdens. Repayments come via a PKR 3.23 per unit surcharge over time.
Exploration and production stocks add 1,084 points to the index. Power generation contributes 888 points. Commercial banks lift 955 points. K-Electric shares rise 23.8 per cent. Bestway Cement gains 17.6 per cent. Hub Power climbs 12.7 per cent. DG Khan Cement adds 11 per cent. Mari Energies surges 9.9 per cent.
Laggards include Tariq Glass Industries, down 7.4 per cent. Engro Polymer and Chemicals falls 6.5 per cent. Punjab Oil Mills drops 6.2 per cent. Pakgen Power declines 5.9 per cent. Bannu Woollen Mills sheds 5.9 per cent. Fertiliser sales jump in August. Urea offtake rises 46 per cent year-on-year. Diammonium phosphate increases 53 per cent. Discounts and stock management fuel this.
Energy imports shift. Crude oil drops 16.3 per cent year-on-year. Petroleum products rise 3.8 per cent. Oil production grows 2.7 per cent week-on-week to 64,313 barrels per day. Gas output increases 2.8 per cent to 2,812 million cubic feet per day. AKD Securities notes weekly volume at 2.2 billion shares, up 20 per cent. It forecasts KSE-100 at 165,215 points by December. Strong fertiliser earnings, bank returns, and E&P cash flows drive this. Falling rates aid stability.
Background: PSX Breaks Record in Evolving Context
PSX breaks record amid FY2024-25 trends. The KSE-100 tops 125,000 points earlier, yielding 60 per cent annual returns or 57 per cent in USD. IMF reforms and rate cuts underpin this. Geopolitical development persists through mid-2025. Red Sea issues hike freight 25 per cent. Diplomatic resets now highlight gains. The US meeting opens FDI in infrastructure. Saudi ties build on 1982 pacts.
Market capitalisation nears PKR 10 trillion. Foreign investors net buy PKR 5 billion last week. Local institutions add PKR 12 billion. This reverses 2024 outflows.
Valuations attract buyers. At 8.52 times forward earnings, PSX KSE-100 trails emerging averages of 12 times. Yields draw investors in high-rate times. The index eclipses the prior peak of 152,665 from early September. Net buying by mutual funds reaches USD 35.6 million. Individuals add USD 6.7 million. Banks and foreigners sell USD 15.8 million and USD 13.7 million, respectively.
Geopolitical Development Boosts Key Sectors
Geopolitical development anchors the PSX KSE-100 rally. Power reforms ease IPP payments in circular debt. Phased surcharges stabilise tariffs for consumers. Banks gain from reserve builds. Loan growth hits 15 per cent year-on-year. Non-performing loans drop to 7.2 per cent.
E&P firms benefit from output rises. Mari Energies supports USD 2 billion annual exports. Cement exporters target Saudi demand post-pact. The government cuts power tariffs by 10 per cent after the debt deal. Japan eyes Reko Diq investments. Pakistan seeks Chinese tariff cuts on 700 items. No mini-budget plans exist, per the Federal Board of Revenue.
What’s Next for Pakistan Stock Market Economic Surge
The Pakistan stock market economic surge depends on follow-through. Full circular debt clearance targets 2026. The October IMF review may release USD 1 billion.
Inflows could double to USD 500 million quarterly. Rail and port links tie to US mineral pacts. Saudi funds aim at renewables, adding PKR 100 billion. Aurangzeb stresses continuity. The resolution restores fiscal discipline and investor confidence. It sets precedents for structural fixes.
As global rates fall, valuations may reach 10 times earnings. Sustained geopolitical development will test this. PSX breaks record and reshapes market dynamics. Investors now anticipate 5 per cent quarterly growth in flux.
Published in SouthAsianDesk, September 28th, 2025
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