Pakistan’s benchmark share index closed at a record high of 73,822, up 1 per cent, after it touched a lifetime peak on Monday, breaching the key level of 74,000 points.

The index has surged 78.6 per cent over the past year and is up 14.1 per cent in the year to date.

During intraday trading, the index hit a high of 74,114 points. On Friday, it closed at a record high of 73,085 points, above the key level of 73,000 for the first time.

, but the government has stressed the need for a fresh, longer-term programme.

An IMF mission led by its chief will meet with authorities in Pakistan this week to discuss a new programme, ahead of Islamabad beginning its annual budget-making process for the next financial year, the IMF resident representative for Pakistan said on Saturday.

Amreen Soorani, head of research at JS Global Capital, said stock market valuations were recovering as talks with the IMF and reforms progressed, and foreign investors showed interest.

She said slowing inflation had also helped the rally.

Pakistan’s consumer price inflation slowed to 17.3 per cent in April from a year earlier, the lowest reading in nearly two years and below the finance ministry’s projections.

The country has struggled with inflation above 20 per cent since May 2022. Inflation jumped as high as 38 per cent in May 2023, as Pakistan navigated reforms as part of an IMF bailout programme.

“Corporate profits are strong, the market’s (price-earning) multiple is still only around 4, which is well below the historical average of 6, including the distressed times in this average,” she added.

Despite that, on Friday in its staff report on the country ahead of talks on a longer term programme, the IMF said downside risks for the Pakistani economy remained exceptionally high, and “political uncertainty remains significant.”

Downside risks for the Pakistani economy remain exceptionally high, the International Monetary Fund (IMF) said earlier, in its staff report on the country, ahead of talks with the fund on a longer term progamme.

An International Monetary Fund mission is expected to visit Pakistan this month to discuss a new programme, ahead of Islamabad beginning its annual budget-making process for the next financial year.

“Downside risks remain exceptionally high. While the new government has indicated its intention to continue the SBA’s policies, political uncertainty remains significant,” said the fund in its staff report following the second and final review under the standby arrangement (SBA).

The fund added that political complexities and high cost of living could weigh on policy, adding that policy slippages, together with lower external financing, could undermine the narrow path to debt sustainability and place pressure on the exchange rate.

The IMF also said higher commodity prices and disruptions to shipping, or tighter global financial conditions, would also adversely affect external stability for the cash-strapped nation.

The fund stressed the need for timely post-programme external financing disbursements.

Pakistan last month completed a short-term $3 billion programme, which helped stave off sovereign default, but the government of Prime Minister Shehbaz Sharif has stressed the need for a fresh, longer term programme.

Pakistan narrowly averted default last summer, and its $350 billion economy has stabilised after the completion of the last IMF programme, with inflation coming down to around 17 per cent in April from a record high 38 per cent last May.

It is still dealing with a high fiscal shortfall and while it has controlled its external account deficit through import control mechanisms, it has come at the expense of stagnating growth, which is expected to be around 2 per cent this year compared to negative growth last year.

Pakistan is expected to seek at least $6 billion and request additional financing from the Fund under the Resilience and Sustainability Trust.

Meanwhile Pakistan State Oil (PSO), the country’s largest oil marketer, says it is in talks with the government on a plan to acquire stakes in public sector energy companies and offset mounting debt it is owed by firms such as the national airline.

Stopping the pile-up of unresolved debt across Pakistan’s power sector, and ultimately settling it, is a top concern of the International Monetary Fund, with which Islamabad begin talks this month for a new long-term loan deal.

“Everything will be done through competitive bidding and we will participate and if we win, the stakes will be offset against (PSO’s receivables),” said Syed Muhammad Taha, the managing director and chief executive of state-backed PSO.