What happened on 22 Dec 2025?

Executive Summary

This briefing synthesizes critical developments across Pakistan's economic landscape, regulatory environment, and financial markets as of December 23, 2025. The nation's cotton and textile sector is navigating an unprecedented crisis, marked by widespread mill closures due to prohibitive costs and competition from cheap imports. Concurrently, the government is advancing its privatization agenda with a fresh bidding process for Pakistan International Airlines (PIA) scheduled.

In the regulatory sphere, significant updates to Pakistan's tax code for 2026 are highlighted, establishing new requirements for advance tax payments, inter-regional tax recovery, and liabilities for residents departing the country. The energy sector is also at a pivotal juncture, with proposed regulations for solar prosumers sparking concern over the future of renewable energy adoption.

Financial markets exhibit a mixed but telling picture. The Pakistan Stock Exchange (PSX) shows signs of pressure, while the rupee remains relatively stable. Commodity markets are seeing historic highs, with both gold and silver reaching new records. Globally, stock markets are buoyed by optimism around artificial intelligence (AI) and anticipated interest rate cuts, while geopolitical tensions in key oil-producing regions are driving energy prices upward.

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1. Pakistan Economic and Corporate Landscape

1.1 Deepening Crisis in the Cotton and Textile Sector

Pakistan's textile industry is facing its worst economic crisis in history, leading to significant industrial shutdowns and economic strain.

• Core Issues: The crisis is attributed to excessive taxes, the highest electricity rates in the region (35 rupees/unit compared to a viable 25 rupees/unit), and the influx of cheap, often under-invoiced, yarn and fabric from China and other nations.
• Industrial Impact: So far, 144 textile and spinning mills have ceased operations, alongside over 400 ginning factories. This has resulted in mass unemployment, a decrease in raw cotton purchases, and a decline in textile product exports.
• Production Statistics: As of December 15, 2025, cotton production in Sindh (2.848 million bales) has surpassed Punjab's (2.453 million bales) by 16%. However, the national crop is now expected to be around 5.5 million bales, significantly lower than initial optimistic forecasts. The Federal Committee on Agriculture (FCA) is criticized for setting unrealistic production targets that are never achieved.
• Market Disruption: For the first time in over 50 years, the Karachi Cotton Association (KCA) has been unable to issue daily spot rates. The Evacuee Property Trust Board, with assistance from the Federal Investigation Agency (FIA), seized and sealed the KCA building on December 12, 2025, causing significant difficulty for the trading community.
• Industry Appeals:
  • Kamran Arshad (Chairman, All Pakistan Textile Mills Association - APTMA): Appeals to the government for immediate revival measures, including reducing electricity tariffs and bringing the interest rate down to single digits. He notes that 19% less electricity is being consumed due to industrial closures.
  • Ehsan-ul-Haq (Chairman, Cotton Ginners Forum): Warns that the unbridled influx of imported yarn has "devastated the domestic spinning industry."

1.2 Privatization of Pakistan International Airlines (PIA)

The government is proceeding with a second attempt to privatise the national carrier after a failed effort in the previous year.

• Bidding Process: A fresh bidding process for a 75% stake in PIA is scheduled for December 23, 2025. Bids will be submitted in closed envelopes, and the Cabinet Committee on Privatisation will set a minimum acceptable price only after receiving them.
• Qualified Bidders: Three consortiums are expected to submit offers:
  1. Lucky Cement Limited, Hub Power Holdings Limited, Kohat Cement Company Limited, and Metro Ventures (Private) Limited.
  2. Arif Habib Corporation Limited, Fatima Fertiliser Company Limited, City Schools (Private) Limited, and Lake City Holdings (Private) Limited.
  3. Air Blue (Private) Ltd.
• Withdrawal: Fauji Foundation has officially withdrawn from the bidding process.

1.3 Key Corporate Developments

• Banking & Fintech: easypaisa Digital Bank announced a partnership with Ant International’s WorldFirst platform. This will allow easypaisa customers to receive cross-border payments and remittances from over 100 countries, a significant move to support freelancers and overseas Pakistanis. The bank processed over 3.8 billion transactions worth more than PKR 15 trillion in 2025.
• Manufacturing & Exports: Millat Tractors Limited (MTL) has signed an agreement with Massey Ferguson Corp (MFC) and AGCO Limited to export Millat-branded tractors directly to the African market, expanding its international footprint.
• Mining & Resources:
  • Finnish technology firm Metso has secured contracts valued at approximately €70 million to supply equipment for the Reko Diq copper-gold mine project.
  • Globacore Minerals Limited, in which Fatima Fertilizer holds a 32% stake, has entered a joint venture with Mari Minerals (a subsidiary of Mari Energies) for mineral exploration in Chagai, Balochistan.
• Pharmaceuticals: BF Biosciences has appointed Muhammad Farhan Rafique as its new CEO, effective January 1, 2026, following the stepping down of founding CEO Akhter Khalid Waheed.
• Technology & Telecom:
  • Samsung: Plans to unveil AI kitchen appliances powered by Google Gemini at CES 2026. The company is also reportedly developing a wide foldable phone for 2026 to compete with Apple's rumored foldable device.
  • HTC: Is betting on an open AI strategy for its new VIVE Eagle smartglasses, which support multiple AI platforms like Google Gemini and OpenAI.
• International Mergers & Bids: Oracle co-founder Larry Ellison has provided a $40.4 billion personal guarantee to back Paramount Skydance's all-cash bid for Warner Bros Discovery.

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2. Regulatory and Taxation Framework

2.1 Federal Board of Revenue (FBR) Taxation Policies (Tax Year 2026)

The FBR has clarified several key tax obligations under the Income Tax Ordinance, 2001.

• Advance Tax for Provincial Businesses (Section 147A): It is mandatory for every Provincial Sales Tax (PST) registered person to pay an adjustable advance income tax.
  • Rate: 3% of the turnover declared to the provincial revenue authority.
  • Frequency: Must be paid monthly, coinciding with the provincial sales tax return filing.
  • Exemption: Businesses on the Active Taxpayers List (ATL) as of June 30 of the previous tax year are exempt.
• Inter-Regional Tax Recovery (Section 146): The FBR is empowered to recover unpaid taxes from individuals residing in Pakistan who were assessed in Azad Jammu & Kashmir (AJK) or Gilgit-Baltistan (GB). If local authorities in AJK/GB cannot recover the dues because the taxpayer has no property there or resides in Pakistan, they can issue a certificate to the FBR, which can then attach and sell property within Pakistan to recover the amount.
• Tax Liabilities for Departing Residents (Section 145): Individuals leaving Pakistan permanently must notify the Commissioner Inland Revenue at least 15 days before their departure and file a tax return covering the period up to the departure date. Failure to comply can result in asset freezes for up to 120 days if offshore tax evasion is suspected.

2.2 Pakistan-Bangladesh Tax Cooperation

FBR Chairman Rashid Mahmood Langrial met with Bangladesh High Commissioner Md. Iqbal Hussain Khan to enhance tax cooperation and bilateral trade. A high-level delegation from Bangladesh's National Board of Revenue (NBR) is visiting from December 22-26 to negotiate a protocol to amend the existing Double Taxation Treaty (DTT) to align it with global standards.

2.3 Energy Sector Regulation (NEPRA)

• Draft Prosumer Regulations 2025: TheNetwork for Consumer Protection has expressed serious concern over NEPRA's draft regulations, arguing they would sharply reduce incentives for household and small commercial solar "prosumers." Proposed changes include reducing buyback tariffs, lowering the allowable system capacity from 150% to 100% of the sanctioned load, and shortening the contract duration to five years. TheNetwork argues this discourages renewable energy and undermines Pakistan's constitutional right to a clean environment.
• Net Billing Cut-off Date: The Korangi Association of Trade and Industry (KATI) has urged NEPRA to notify a clear cut-off date for net billing. This is to protect consumers who have already installed solar systems and have applications pending with distribution companies (Discos), ensuring they are not disadvantaged by procedural delays at the utility level.

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3. Market Performance and Analysis

3.1 Pakistan Stock Exchange (PSX)

The PSX experienced a volatile and predominantly bearish session on December 22, 2025, influenced by the onset of the roll-over week.

• KSE-100 Index: The benchmark index shed 200 points (0.12%) to close at 171,204 points.
• Trading Activity: The session was characterized as range-bound and lackluster, with total turnover at 684.55 million shares valued at Rs30.1 billion. Market breadth was negative, with 288 companies declining and 143 advancing.
• Key Movers: Positive contributions from LUCK, ENGROH, and FATIMA were offset by losses in major banking and financial stocks like HBL, UBL, and FFC.

3.2 Currency and Commodity Markets in Pakistan

• Pakistani Rupee (PKR): The rupee showed minor strength, gaining 3 paisa against the US dollar in the interbank market to close at Rs280.22. Stability is attributed to lower importer demand and inflows from the IMF.
• Precious Metals: Gold and silver prices surged to new all-time highs in the local market.
  • Gold: Price per tola reached Rs462,362 after a single-day increase of Rs6,200.
  • Silver: Price per tola reached Rs7,205 after an increase of Rs218.

3.3 Global Stock Market Overview

Global markets started the holiday-shortened week on a strong footing, driven by tech sector optimism and rate-cut expectations.

• Asia: Japan’s Nikkei jumped on a weaker yen and AI optimism. Chinese and Hong Kong stocks rose on signs of money inflows. Markets in South Korea, Taiwan, and Australia also posted strong gains.
• Europe: Shares were steady to muted, with commodity-linked sectors gaining while beverage stocks weighed on indices.
• United States: Wall Street opened higher, with the S&P 500 and Nasdaq Composite Index both advancing.
• Gulf Markets: Most Gulf markets ended higher, supported by rising oil prices and hopes for Federal Reserve rate cuts.

3.4 Global Energy and Commodity Markets

• Oil Prices: Crude oil prices climbed due to heightened geopolitical risks of supply disruption.
  • Key Drivers: The US Coast Guard's pursuit of Venezuelan oil tankers and Ukrainian drone attacks on Russian vessels in the Black Sea region.
  • Price Movement: Brent crude futures rose 2.3% to 61.85 a barrel**, while US WTI crude rose 2.3% to **57.81 a barrel.
• Precious Metals (International): International gold prices surpassed the 4,400 per ounce** level for the first time, while silver hit a fresh record at **69.44 per ounce.
• Production News: China's CNOOC announced that a new offshore oil project in the South China Sea has commenced production, with an expected plateau of 18,000 barrels per day in 2026.