KARACHI: Pakistan’s equity market surged on Monday as optimism over a prospective UAE investment in Fauji Foundation boosted risk appetite, driving the Pakistan Stock Exchange to a new all-time intraday high.

The benchmark KSE-100 Index climbed to an intraday peak of 174,411.72 points, gaining 2,010.99 points, or 1.17%. The index later touched a low of 173,200.41, still up 799.68 points, or 0.46%.

Market participants attributed the rally to expectations that the UAE may acquire a shareholding in Fauji Foundation as part of broader economic cooperation, helping settle a $1 billion rollover liability.

Ahsan Mehanti, managing director and chief executive of Arif Habib Commodities, said bullish activity was witnessed as investors reacted to news of the potential UAE investment and the expected conclusion of the $1 billion rollover liability. He added that government deliberations on privatisation of loss-making state-owned enterprises, rupee stability, and rising global oil prices also acted as catalysts for the market’s upward momentum.

Deputy Prime Minister and Foreign Minister Ishaq Dar said on Saturday that the UAE is set to acquire shares in Fauji Foundation, a move expected to help resolve a $1 billion liability. He added that a further $2 billion loan could be rolled over, following discussions held during the UAE president’s recent visit. Islamabad is also seeking to persuade the UAE to reinvest $2 billion due in January, with hopes that the share acquisition will be completed by March 31, 2026.

Independent investment and economic analyst AAH Soomro said Dar’s comments on the potential acquisition of Fauji Group shares sparked a rally in Fauji Group companies, which largely drove the market higher during the session. He added that overall bullish sentiment remained intact.

Commenting on the record high, finance ministry adviser Khurram Schehzad said in a post on X that the KSE-100 crossing 174,400 points marked yet another milestone for the market. He noted that since January 2025, the PSX has delivered over 50% returns in US dollar terms, while the equity investor base has surpassed 450,000, reflecting an increase of more than 120,000 investors, or 37%, over the past 18 months.

On Friday, the KSE-100 Index had closed higher by 1,570.51 points, or 0.92%, at 172,400.73, compared with 170,830.22 a day earlier, after trading between a high of 172,582.96 and a low of 171,146.14.