Bulls continued their record-setting spree at the Pakistan Stock Exchange (PSX) as shares surged another 1,200 points on Thursday, crossing the 119,000 barrier in intraday trade.

The benchmark KSE-100 index climbed 1,215.46 points, or 1.03 per cent, to reach 119,189.48 from the last close of 117,974.02 at 9:43am.

Finally, the index closed at 118,769.77, up by 795.75 or 0.67pc, from the previous close.

Mohammed Sohail, chief executive of Topline Securities, attributed the momentum to “buying by local funds is continuing in expectations” of the government reaching the International Monetary Fund (IMF) staff-level agreement (SLA) soon.

Yousuf M. Farooq, director research at Chase Securities, said, “The KSE-100 Index hit a new all-time high today, driven by improved clarity on the IMF programme, expectations of economic stability, recovering sectoral demand, and anticipated reductions in electricity prices.”

He noted that following a strong rally from October to December 2024, the market had “paused ahead of the IMF review but has now surpassed its previous high”.

“We believe retail investors should look beyond short-term volatility and maintain a long-term perspective,” he highlighted, adding that index had “surged from just 1,500 points in 2000 to 119,000 points today”.

With an expected long-term return of 16 to 18pc, Farooq said that the index had the “potential to double every 4-4.5 years, though investors should be prepared for significant drawdowns along the way”.

Awais Ashraf, director research at AKD Securities, echoed the same sentiments.

“Investors remain optimistic about improving macroeconomic indicators following the successful completion of the IMF’s first review, coupled with expectations of favourable investment outcomes, particularly in the mining and automotive sectors,” he said.

He added that stock market was likely to sustain “as the anticipated one-time clearance of circular debt is expected to keep energy stocks in focus”.

Yesterday, shares had continued their upward trajectory, which analysts attributed to “expectations that government will agree with banks to resolve old circular debt issues that will help listed energy companies”.

The government last week announced it had reached an agreement with banks to extend PHL, a state-owned entity, Rs1.25 trillion in financing at a favourable floating interest rate of Kibor minus 0.90pc per annum.

The move was described as part of a broad strategy to eliminate the circular debt that has plagued Pakistan’s power sector, which has been fuelled by unpaid bills, theft, and distribution losses that have continued to accumulate over the past decade.

The circular debt crisis is one of the most contentious issues in Pakistan’s negotiations with the IMF. While the government aims to retire Rs1.5tr of circular debt through Rs1.25tr in new borrowing and Rs250bn in budget support, it does little to address the underlying issues fuelling the debt buildup.

According to news reports, the IMF has permitted Pakistan to borrow Rs1.25tr ($4.5bn) from domestic banks to help manage the Rs2.4tr circular debt in the power sector without increasing public debt.

The investor confidence was further lifted as the IMF shared a draft of the Memorandum of Economic and Financial Policies (MEFP) with Pakistani authorities, marking progress toward a SLA under the $7bn Extended Fund Facility (EFF). This reinforced hopes for sustained financial support and economic stability.

PM Shehbaz expresses satisfaction regarding historic bullish trend

Meanwhile, Prime Minister Shehbaz Sharif expressed his satisfaction regarding the bull run witnessed at the PSX, state-run Radio Pakistan reported.

In a statement today, the premier said that the positive trend at the stock exchange reflected “growing confidence of traders and investors in the government’s economic policies”.

He said that the improving economic indicators and business environment “become possible due to the government’s economic policies over the past one year”.

The premier added that the government was providing all-out facilities on a “priority basis for a conducive environment for business and investment in the country”.