PSX Decline: IMF Compliance Concerns
- Karachi—The Pakistan Stock Exchange (PSX) experienced important volatility on Thursday, just before the Eidul Azha holiday.The benchmark KSE index briefly exceeded 122,000 before succumbing to mid-session selling pressure,...
- The market's downturn followed the International Monetary Fund's (IMF) emphasis on strict agricultural tax enforcement.
- Ahsan Mehanti of Arif Habib Corporation attributed the bearish close to several factors, including anticipated higher taxes on banking and savings scheme income, petroleum levies in the upcoming...
Teh Pakistan Stock Exchange (PSX) felt the heat,experiencing volatility just before the Eidul Azha holiday – investors took profits amid IMF compliance concerns. The KSE index closed down, ending its record streak as strict tax enforcement became a focal point.The IMF’s scrutiny of fiscal policies, including agricultural taxes and energy subsidies, weighed on market sentiment. higher taxes,rupee instability,and export concerns amplified the downturn. Trading volume surged, even if values dipped. News Directory 3 readers should note that investors are now braced for the federal budget, which will be announced in the next few days, alongside economic reforms. Discover what’s next for the KSE index.
Pakistan Stock Exchange Sees Volatility Ahead of Eid
Updated June 6, 2025
Karachi—The Pakistan Stock Exchange (PSX) experienced important volatility on Thursday, just before the Eidul Azha holiday.The benchmark KSE index briefly exceeded 122,000 before succumbing to mid-session selling pressure, halting its previous record-setting performance. This market correction reflects investor sensitivity to both domestic fiscal policy and international oversight.
The market’s downturn followed the International Monetary Fund’s (IMF) emphasis on strict agricultural tax enforcement. The IMF also voiced concerns regarding plans to sell surplus power at reduced rates and stressed the need for strategies to combat tax evasion and financial leakage.Additionally, the Fund expressed opposition to provincial energy subsidies, further contributing to market unease.
Ahsan Mehanti of Arif Habib Corporation attributed the bearish close to several factors, including anticipated higher taxes on banking and savings scheme income, petroleum levies in the upcoming fiscal year 2026 budget, rupee instability, and a 10% contraction in May exports. These elements combined to create a challenging environment for investors.
Topline Securities reported that the KSE index fluctuated between a high of 483 points and a low of 281 points before closing at 121,641,a decrease of 157.87 points, or 0.13%, from the previous day. This intraday swing highlights the degree of uncertainty present in the market.
Engro Holdings, Packages Ltd, Services Industries, Colgate-Palmolive, and K-Electric made the most positive contributions to the index, collectively adding 403 points. In contrast, Meezan Bank, systems Ltd, Fauji Fertiliser, Bank Al-Habib, and Lucky cement detracted 320 points.
According to ali Najib, Deputy Head of Trading at AHL, investors opted to secure profits ahead of the four-day Eid break. Trading is scheduled to resume on Tuesday, coinciding with the federal government’s budget announcement for 2025-26. This timing suggests a cautious approach as investors await further fiscal details.
Despite the index decline, market participation remained robust.Trading volume increased by 22.26% to 854.61 million shares. However, the value traded decreased by 26.75% to Rs25.79 billion, indicating a shift in the types of stocks being traded.
What’s next
Market participants will be closely watching the federal budget announcement for fiscal year 2026, assessing the impact of new tax policies and government spending plans on the Pakistan stock exchange. The KSE index‘s reaction to the budget,coupled with ongoing discussions with the IMF regarding economic reforms,will likely shape the market’s trajectory in the coming weeks.