Mazaj News (Web Desk) The stock market advanced on Monday, led by strong performance in mid-cap stocks, as investors positioned themselves for potential interest-rate cuts, a contained current-account deficit, expectations of debt restructuring, and optimism over lower borrowing costs from a possible panda bond issuance.
At the Pakistan Stock Exchange (PSX), the benchmark KSE-100 Index fluctuated between an intraday high of 187,491.69, gaining 2,392.86 points or 1.29%, and a low of 186,127.35, up 1,028.52 points or 0.56%, compared with the previous close of 185,098.83. According to independent investment and economic analyst AAH Soomro, buying interest in mid-cap stocks reflected hopes of monetary easing, a manageable current-account deficit, restructuring-related developments, and expectations of cheaper financing through a panda bond launch. He added that the positive momentum is likely to persist.
A survey conducted by Topline Research ahead of the State Bank of Pakistan’s (SBP) Monetary Policy Committee meeting scheduled for January 26 indicates that 80% of respondents anticipate a rate cut. Among them, 56.4% expect a reduction of 50 basis points, 15.4% foresee a 100-basis-point cut, 5% predict a 25-basis-point cut, and 3% expect a 75-basis-point move, while the remaining 20% believe rates will remain unchanged. The SBP had previously lowered rates by 50 basis points at its December 15, 2025 meeting.
Meanwhile, SBP foreign-exchange reserves increased by $16 million to $16.072 billion during the week ended January 9, taking total liquid reserves to $21.248 billion. Commercial bank reserves stood at $5.177 billion, reflecting a weekly rise of $40 million. The central bank attributed the improvement to ongoing dollar purchases in the market, supported by a more stable current account and steady remittance inflows. Between June 2024 and September 2025, net foreign-exchange purchases amounted to $9.7 billion.
Looking ahead, the SBP has projected the current-account deficit for FY26 to remain between 0% and 1% of GDP and expects foreign-exchange reserves to reach $17.8 billion by June 2026, assuming planned official inflows materialise. Separately, the Ministry of Finance announced plans to tokenise up to $2 billion of domestic government debt in the initial stage as part of efforts to widen investor participation and modernise the public-debt market.
The KSE-100 closed the previous week at 185,099 points, marking a week-on-week gain of 689 points, as late-session buying helped counter earlier weakness. Although market volatility stayed high, investor sentiment improved on the back of easing regional geopolitical tensions, a sharp decline in Pakistan Investment Bond (PIB) yields—down between 59 and 70 basis points across two-, three-, five- and 10-year maturities—and positive reform-related developments. However, average daily trading volumes declined 24.5% from the prior week to 1.2 billion shares.