PSX sustains record-setting pace driven by upbeat economic outlook
1. Stocks hit new all-time high amid receding fears over mini-budget, IHC relief on banking sector tax levies, analysts say
**Stocks Hit Record High as Market Rallies on Strong Economic Signals**
Stocks extended their winning streak on Friday, with the Pakistan Stock Exchange (PSX) hitting a new all-time high. The benchmark KSE-100 Index surged 571.75 points to close at 94,763.64, after briefly crossing the 95,000 mark with an intraday peak of 95,278.26 points.
The rally was driven by strong forex reserves, a stable rupee, and diminishing concerns about a potential International Monetary Fund (IMF)-imposed mini-budget, all contributing to a risk-on sentiment among investors.
### **Investor Confidence Surges**
Ahsan Mehanti, Managing Director & CEO at Arif Habib Commodities, attributed the record high to easing fears over new taxation measures and a recent Islamabad High Court (IHC) decision providing relief to the banking sector on tax levies.
“Falling bank lending rates and rupee stability have further fueled the ongoing capital market rally,” Mehanti said.
Central bank-held foreign exchange reserves climbed to a two-year high of $11.26 billion as of November 8. The rupee also gained strength for a second consecutive day, supported by exporters’ dollar inflows and higher remittances exceeding import demand.
### **IMF’s Positive Outlook**
Investor sentiment was bolstered by reports that the IMF mission, led by Nathan Porter, has raised no objections regarding Pakistan’s revenue collection performance. This eases concerns over the need for a supplementary finance bill.
The IMF acknowledged a 1.5 percentage point increase in Pakistan’s tax-to-GDP ratio, a key milestone achieved by the Federal Board of Revenue (FBR). This progress reduces the likelihood of additional taxation measures in the near term, aligning with the IMF’s fiscal targets under the Extended Fund Facility (EFF).
Previously, the IMF required Pakistan to increase its tax-to-GDP ratio by 3% over the 37-month programme, with half of the target due in the current fiscal year.
### **Sector Highlights**
The blue-chip banking sector was a major focus of trading activity. Reports that a dozen banks secured temporary IHC relief against government taxes for missing private sector borrowing targets sparked significant interest. **Outlook**
The market’s upward trajectory reflects renewed confidence in Pakistan’s economic outlook, supported by strong macroeconomic indicators, policy stability, and progress in meeting IMF conditions. With continued positive developments, analysts predict further gains in the coming sessions.
