PSX outlook optimistic as circular debt developments and corporate results take center stage: report

Pakistan Stock Exchange (PSX) is expected to remain positive in the coming weeks, with further developments over circular debt expected to drive the market, along with upcoming corporate results remaining in the limelight, according to a report by AKD Securities. 

The market sustained its bullish momentum throughout the week, driven by anticipation of strong earnings during the ongoing results season. Consequently, the market reached its all-time highest closing of 145,647 points on Thursday, and closed the week at 145,383 points, up 4,348 points (3.08% WoW), with a slight decline in the last trading session on Friday.

Market participation also increased, with the average daily traded volume rising by 16.3% WoW to 653 million shares, up from 561 million shares in the previous week. 

In terms of macroeconomic data, the trade deficit for July 2025 stood at $2.8 billion, up 44% YoY, while workers’ remittances for July 2025 amounted to $3.2 billion, reflecting a 7% YoY increase. Additionally, SBP’s foreign exchange reserves decreased by $72 million WoW, closing the week at $14.2 billion as of August 1st.

On the currency front, the PKR appreciated by 0.1% WoW against the USD, closing the week at PKR 282.47/USD. Key sectoral developments included a robust 30% YoY growth in cement dispatches for July 2025, while OMC offtakes reached 1.2 million tons (up 2% YoY).

On the international front, the Trump administration imposed an additional 25% tariff on India, raising reciprocal tariffs to 50%.

Other major news during the week included: 1) Pakistan receiving a 19% tariff after the US drives a hard bargain, 2) SBP increasing the housing finance limit for microfinance borrowers to PKR 5 million, 3) ExxonMobil likely to return for offshore ventures, 4) Pakistan set to initiate dialogue with Qatar on LNG supplies, and 5) Budget deficit dropping to 5.4% in FY25 from 6.8% in the previous year.

Sector-wise, Woollen, Jute, Insurance, Tobacco, and Food & Personal Care were among the top performers, up 13.3%, 7.2%, 5.2%, 5.0%, and 4.4% WoW, respectively. Conversely, Synthetic & Rayon, Close-end Mutual Funds, Chemical, Sugar & Allied Industries, and Textile Weaving were the worst performers, with declines of 3.2%, 1.9%, 1.6%, 0.7%, and 0.6% WoW, respectively.

Flow-wise, major net selling was recorded by Banks/DFIs, with a net sell of $18.8 million, while Mutual Funds absorbed most of the selling, with a net buy of $22.9 million.

Company-wise, top performers during the week were: 1) AGL (up 31.5% WoW), 2) NESTLE (up 16.8% WoW), 3) UNITY (up 16.4% WoW), 4) HBL (up 14.9% WoW), and 5) BNWM (up 13.3% WoW). The top laggards were: 1) GADT (down 9.6% WoW), 2) PKGP (down 6.1% WoW), 3) FABL (down 5.0% WoW), 4) LCI (down 4.2% WoW), and 5) IBFL (down 3.7% WoW).

The KSE-100 is anticipated to maintain its upward trajectory, with a target of 165,215 points by December 2025, primarily driven by strong earnings in fertilizers, sustained ROEs in banks, and improving cash flows of E&Ps and OMCs, benefiting from falling interest rates and economic stability.