Markets 📈 Oil ⛽ Pressure 📉

Another Week, Another Pulse!

While all eyes were on Islamabad this weekend, the fallout was enough to inject fresh uncertainty into the world’s most sensitive energy and shipping corridors, as diplomatic talks ended without a deal and immediate ripple effects began appearing across key maritime routes.

US–Iran negotiations hosted in Islamabad collapsed without agreement, with US Vice President JD Vance confirming that American officials walked away after Iran refused to commit to halting nuclear weapons development. President Donald Trump escalated tensions further, warning of a possible US naval blockade of the Strait of Hormuz and interception of vessels linked to Iran moves that quickly heightened risk perception across global energy corridors. Iran’s Parliamentary Speaker Mohammad Baqer Ghalibaf blamed Washington for the breakdown, citing a failure to build trust between the two sides. Even after the public collapse, US envoy Steve Witkoff and advisor Jared Kushner remained in Islamabad in an effort to keep backchannel diplomacy alive under Pakistan’s mediation.

The market reaction was immediate in behavior if not in headlines. Two large crude carriers briefly reversed course near the Strait of Hormuz as uncertainty rose around potential escalation. The message from shipping routes was clear: even the possibility of disruption in this corridor is enough to change movement patterns. For Pakistan, the stakes are direct any sustained volatility in oil routes feeds into import costs, inflation pressure, and external account stress.

Back home, fiscal planning is moving under tight constraints. The government is preparing to present the FY2026-27 budget immediately after Eid al-Adha, as consultations intensify across institutions. At the same time, Pakistan is balancing financing needs with scrutiny: a $1 billion budget support loan from Asian Development Bank has been approved for climate resilience initiatives, while a $40 million project was deferred after procurement costs for furniture and laptops were flagged as excessive, reflecting rising focus on spending efficiency.

The IMF continues to shape policy direction, pressing Pakistan to remove distortions in petroleum pricing even as it had earlier accommodated a Rs152 billion subsidy cap during recent global oil volatility linked to Middle East tensions and temporary disruptions in the Strait of Hormuz. The underlying direction is clear temporary relief is acceptable, but structural pricing reform is now unavoidable.

On the external front, Pakistan has secured important breathing space. Saudi Arabia and Qatar have jointly pledged around $5 billion in financial support, easing pressure on reserves ahead of upcoming debt repayments. Domestically, Prime Minister Shehbaz Sharif announced a sharp reduction in fuel prices Rs135 per litre cut in diesel and Rs12 per litre in petrol—passing on the benefit of easing global prices during a brief stabilization window.

The macroeconomic picture remains uneven. Inflation continues to edge higher, with the Sensitive Price Indicator rising 1.93% for the week ending April 9, signaling ongoing pressure on household budgets. Growth forecasts are split: the Asian Development Bank projects 3.5% growth in 2026 and 4.5% in 2027, while the World Bank has lowered its outlook to 3% for the current fiscal year, citing risks from oil price volatility, remittances, and external demand pressures.

Policy direction is increasingly focused on growth and stability. The upcoming budget is expected to prioritize real estate, exporters, SMEs, and the salaried class. At the same time, structural reforms are advancing: the State Bank of Pakistan has introduced measures to simplify processes for IT exporters and freelancers to boost digital services exports, while IMF-linked governance reforms include publishing asset declarations of senior civil servants and strengthening anti-corruption institutions.

In the real economy, mixed signals continue to emerge. Pakistan has gained new export access as Russia approved potato imports from Punjab, supporting agricultural diversification. However, cost pressures are rising sharply, with Sona DAP fertilizer crossing Rs15,000, increasing input costs ahead of the sowing season. Meanwhile, Punjab’s wheat crop is under stress following an early heatwave and unseasonal rains, raising concerns over yield at a critical stage.

All attention now shifts to the upcoming IMF mission expected next month, which will play a key role in finalizing the FY2026-27 budget framework, particularly revenue targets and tax reforms.

Because ultimately, the next shock if it comes won’t announce itself in headlines. It will show up in oil prices, in inflation numbers, and in the cost of everyday life.

🎧 Tune in to this week’s Pulse:

Youtube - https://youtu.be/mUe_-J8YlSY

Spotify - https://open.spotify.com/episode/1idd4r4ggy6Cutlw89KQYt?si=1-EZfcl5TaCr580KTNjODA

The Pakistan Stock Exchange saw a sharp turnaround this week, with the KSE-100 index rallying over 11% week-on-week to close at 167,191 points, as easing geopolitical pressure and improving macroeconomic signals drove strong investor participation across major sectors and revived overall market sentiment.

SECP Clears Wahdat Poultry Farm IPO as PSX Sees 8th Listing This Fiscal Year

The SECP has approved the IPO of Wahdat Poultry Farm Limited, marking the 8th listing on the Pakistan Stock Exchange this fiscal year, with the company set to raise around Rs. 637 million through a mix of new and existing shares via book-building, mainly for expansion and working capital, reflecting continued investor interest despite economic challenges.

Pakistan to Repay Nearly $5 Billion Foreign Debt By June 2026

Pakistan is set to repay around $4.8 billion in external debt by June 2026, including $3.5 billion to the UAE and a $1.3 billion Eurobond maturing this week, reflecting a tight near-term repayment cycle; while the government says the UAE deposits are part of routine arrangements and has secured over $5 billion in assurances from allies, the reliance on rollovers remains high, with about $12 billion in expected refinancing needs from partners like Saudi Arabia and China to support external stability going forward.

SBP Allows Exchange Firms to Book PKR/$ Rates in Advance to Increase Remittances

The State Bank of Pakistan (SBP) has allowed exchange companies to lock PKR/USD rates in advance through short-term forward sales against remittance inflows for up to five working days, aiming to improve liquidity and encourage remittances through formal channels; the move is expected to support external inflows and ease pressure on reserves, with exchange firms handling about $5 billion in remittances out of $38 billion total in FY25, and has been welcomed by industry players as a positive step for stability and efficiency.

Asian Development Bank to support Pakistan’s solar transition, power sector reforms

The Asian Development Bank (ADB) is expected to support Pakistan’s power sector reforms, including the shift from solar to battery energy storage systems and improvements in planning, digitisation, and data governance, as part of broader efforts to strengthen grid resilience and manage the growing impact of renewable energy.

IMF expects to provide vulnerable economies hit by Middle East war up to $50 billion

The International Monetary Fund (IMF) has warned that countries affected by the Middle East conflict may require between $20 billion and $50 billion in emergency financial support, as the war continues to disrupt supply chains, push up energy costs, and strain vulnerable economies; IMF Managing Director Kristalina Georgieva said the crisis is likely to have lasting “scarring effects,” particularly for low-income, energy-importing countries with limited fiscal space, while also signaling that global growth forecasts for 2026 will be downgraded due to higher inflation and weaker confidence, underscoring how prolonged geopolitical instability is increasing pressure on global financial safety nets and external financing needs.

Is Pakistan’s Investment Landscape Turning Green? 🌍💹

The SECP Pakistan has officially proposed a new framework for ESG Mutual Funds (Environmental, Social, and Governance). This move aims to align our capital markets with global sustainability trends, allowing investors to earn returns while supporting ethical and eco-friendly businesses. 🇵🇰

Why this matters:

✅ Impact: Directs capital toward renewable energy and social responsibility.

✅ Transparency: Strict proposed rules to prevent "greenwashing."

✅ Standardization: Aligning with international IFRS sustainability standards.

The proposal is currently open for public consultation until April 21, 2026. This is a significant step toward a more responsible financial ecosystem in Pakistan.

Do you believe ESG-aligned assets are the future of the PSX, or is the market not ready for this shift? 🧐👇

Read the full proposal here: 🔗 https://t.co/GWGrMmDDy6

_{Today’s Pulse by Capital Stake is brought to you by Hubab Irfan}