ISLAMABAD: The Pakistan Stock Exchange (PSX) on Monday closed at an all-time high of 173,896 points, traders and analysts said, attributing it to investor confidence in a prospective United Arab Emirates (UAE) investment in a Pakistani conglomerate, Fauji Foundation.

The benchmark KSE-100 index gained 1,495.61 points, or 0.87%, to close at 173,896.34, up from the previous close of 172,400.73. The index crossed 174,000 points during intra-day trading, with Pakistan's Finance Adviser Khurram Schehzad calling it a "strong start" to the week.

Ahsan Mehanti, Chief Executive Officer of Arif Habib Commodities, said the government’s deliberation on the privatization of ailing state-owned enterprises, rupee stability, and surging crude oil prices also played a catalytic role in the bullish trend.

"Stocks closed all-time high as investor eye UAE $1 billion rollover liability set to end [by] acquiring shareholding in Fauji Foundation," he told Arab News.

The development came days after Pakistan's Deputy Prime Minister Ishaq Dar said the country was seeking to convert part of its financial support from the UAE into long-term investment to reduce external debt.

Pakistan has been in talks with the UAE to convert its $1 billion loan in deposits into equity investment, potentially involving stakes in companies linked to the Fauji Fertilizer Group — a move that would eliminate Pakistan’s repayment obligation.

Since Jan 2025, the PSX has delivered more than 50% returns in US dollar terms, making it one of the best markets in Asia, with 2025 being another year of strong gains for investors, according to Schehzad.

"Investor participation is rising fast — the equity investor base has crossed 450,000, up 120,000+ investors (+37%) in 18 months," he said on X.

"These record levels reflect growing investor confidence, supported by continued macro stability, key reforms, and improving prospects for more sustainable, higher future growth."

In recent years, Pakistan has implemented stringent structural reforms under the International Monetary Fund (IMF) loan programs, aimed at reducing fiscal deficits and restoring investor confidence.

The South Asian country’s foreign exchange reserves have also risen past the $21 billion mark, according to the central bank’s latest data.