The equity market opened higher on Friday as investor sentiment improved on renewed US-Pakistan trade ties and parliamentary approval of the federal budget.
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index climbed to an intraday high of 123,628.23, gaining 1,581.77 points, or 1.3%, and touched a low of 122,222.69, reflecting an uptick of 176.23 points, or 0.14%, from the previous close of 122,046.46.
“Optimism is back owing to renewed US-Pakistan ties and macroeconomic rerating,” said independent investment and economic analyst AAH Soomro. “Valuations are attractive compared to fixed income alternatives,” he added.
The National Assembly on Thursday approved the federal budget for FY2025–26, amounting to Rs17.57 trillion, after adopting amendments to the Finance Bill 2026.
Finance Minister Muhammad Aurangzeb presented revisions including changes to the Sales Tax Act, notably a clause empowering the finance committee to authorise arrests in cases of tax fraud above Rs50 million.
The bill also laid out a revised income tax structure for salaried individuals.
Incomes up to Rs600,000 remain tax-exempt, while those between Rs600,000–1.2 million will be taxed at 1%.
Fixed tax slabs apply to higher brackets, scaling up to Rs346,000 for incomes between Rs3.2 million and Rs4.1 million.
In a boost to market sentiment, Pakistan and the United States are on track to conclude ongoing trade talks, with both sides actively exploring a Preferential Trade Agreement (PTA) aimed at boosting reciprocal market access and strengthening bilateral trade.
The finance minister held a virtual meeting with US Commerce Secretary Howard Lutnick on Tuesday to discuss tariff arrangements.
According to an official announcement following the meeting, both sides expressed confidence in concluding the trade negotiations at the earliest.
In the aftermath of Field Marshal Asim Munir’s recent visit to the US, diplomatic and economic channels between the two nations have intensified.
Negotiators are currently exploring pathways to finalise either a PTA or a Bilateral Trade Agreement (BTA).
Investor confidence was also buoyed by continued support from overseas Pakistanis through the Roshan Digital Account (RDA), with total inflows reaching $10.38 billion from September 2020 to May 2025.
In May alone, RDA inflows rose 13% month-on-month to $201 million. The number of digital accounts increased to 823,224.
According to Saad Hanif, head of research at Ismail Iqbal Securities, $6.65 billion from RDA has been invested locally, primarily in Naya Pakistan Certificates and Roshan Equity, while $1.95 billion remains repatriable.
On Thursday, the KSE-100 had fallen by 715.18 points, or 0.58%, to close at 122,046.46. The index had touched a high of 123,417.87 and a low of 122,142.43 during the session.
