Karachi: The KSE-100 index experienced a significant decline this week, driven by escalating geopolitical tensions and domestic security concerns. The index fell by 5,108 points or 2.9% week-on-week, marking a cumulative decline of 11.2% since its peak in January 2026. A partial recovery was observed towards the end of the week due to reports of constructive progress in Iran's negotiations, with further talks scheduled in Vienna next week.
According to JS Global, an IMF mission has arrived in Pakistan for the third review of the Extended Fund Facility program, with discussions set to commence next week. The IMF acknowledged Pakistan's policy stabilization efforts but raised concerns about securing a one-year rollover of US$2 billion in UAE deposits. The finance minister expressed confidence, citing an existing short-term arrangement and ongoing talks for a longer-term extension.
In addition, Pakistan's planned US$250 million Panda bond issuance has been delayed due to its weak credit profile, limiting direct access to Chinese debt markets. The State Bank of Pakistan's latest data indicates an increase in profit repatriation by 26% to US$1.7 billion, while foreign direct investment has declined by 41% in the first seven months of the fiscal year 2026.
Furthermore, Pakistan's power minister announced expectations to complete the first 200-megawatt electricity transaction under a competitive wheeling auction by June 2026. Meanwhile, the State Bank of Pakistan's reserves remained stable week-on-week at US$16.2 billion.
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