Key points
- KSE-100 Index rises to intraday high of 147,534.41points
- Moody’s has upgraded Pakistan’s credit rating from Caa2 to Caa1
- Reserves are forecast to reach $15.5 billion by end-December 2025
ISLAMABAD: The equity market advanced on Friday as investor sentiment strengthened better results and expectations of further improvement in the economic environment.
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index climbed to an intraday high of 147,534.41, gaining 1,005.11 points, or 0.69 per cent, before retreating to a low of 146,894.62, reflecting a fall of 35.22 points, or 0.02 per cent, according to Geo News.
Credit rating
Moody’s has upgraded Pakistan’s credit rating from Caa2 to Caa1, citing an improved external position and progress on reforms under the IMF (International Monetary Fund) Extended Fund Facility (EFF) programme.
The agency noted that foreign exchange reserves are likely to continue improving, though dependent on timely financing from official partners, while fiscal strengthening is supported by a broader tax base. However, it cautioned that debt affordability remains among the weakest globally, with governance and political uncertainty still high.
Third upgrade
This marks the third upgrade in four months, following similar moves by S&P Global Ratings and Fitch Ratings, underpinned by Prime Minister Shehbaz Sharif’s government’s commitment to fiscal consolidation and reforms.
On the performance front, Pakistan secured the top global spot for equity returns in USD over FY24–FY25 combined, Bloomberg data showed. In FY25 alone, Pakistan ranked eighth globally but outperformed regional peers, returning far more than India’s BSE Sensex (+3.2 per cent), China (+14.8 per cent) and India’s broader market (+6 per cent), according to AHL data.
Forex reserves
The State Bank of Pakistan’s (SBP) latest Monetary Policy Report (MPR) projected GDP growth at 3.25–4.25 per cent in FY26 and a current account deficit between zero and 1.0 per cent of GDP.
With the policy rate maintained at 11 per cent in June and July, the SBP expects the real policy rate to remain positive to stabilise inflation within target. Reserves are forecast to reach $15.5 billion by end-December 2025, supported by projected financial inflows and continued SBP FX purchases.
