The Pakistan Stock Exchange (PSX) is expected to remain positive in the coming weeks, with developments related to circular debt anticipated to drive the market, alongside upcoming corporate results taking the spotlight, according to a report by AKD Securities.
The market remained volatile during the week, opening positively on strong corporate results and optimism surrounding the upcoming industrial policy, with reports indicating that the government plans to phase out the super tax over the next five years. Positive sentiment was further supported by Moody’s upgrading Pakistan’s rating by one notch from Caa2 to Caa1.
However, delays in circular debt payments impacted the E&P and OMC sectors, dragging the index by 214 points and 159 points, respectively. Overall, the KSE-100 index gained 1,109 points, or 0.76% week-on-week, to close at 146,492 points on Friday.
Market participation declined 7.2% week-on-week to 606 million shares, down from 653 million shares in the previous week. Pakistani officials are also in discussions with the US regarding the details of a trade deal. The visit of Field Marshal yielded a positive outcome, with the US designating BLA as a terrorist organization, fulfilling a long-standing request from Pakistan. On the sectoral front, passenger car and LCV sales rose 28% year-on-year, supported by a low base from last year’s plant shutdowns.
On the currency front, the Pakistani Rupee appreciated for the fourth consecutive week, closing at PKR 282.06 per US dollar, up 0.14% week-on-week. Other developments during the week included anticipation of a US$1 billion third IMF tranche, Saudi Crown Prince inviting PM Shehbaz Sharif to an investment conference, government pressing China on Gwadar plan, debt re-profiling with Chinese IPPs with implementation proposals expected from PD and FD, and Ogra drafting new petroleum rules to resolve supply disputes.
Sector-wise, leasing companies, textile spinning, and auto parts led gains, rising 13.5%, 7.7%, and 6.2% week-on-week, while woollen, jute, and OMC sectors reported declines of 5.7%, 3.2%, and 2.7%, respectively. In terms of market flows, banks and other organizations recorded net selling of US$9.8 million and US$4.2 million, respectively, with mutual funds absorbing most of the selling with a net buy of US$15.3 million.
Company-wise, top performers included AIRLINK (up 19.7%), THALL (up 16.8%), YOUW (up 15.1%), FABL (up 8.7%), and FHAM (up 8.4%), while UNITY (down 8.3%), GADT (down 7.8%), PSX (down 5.9%), BNWM (down 5.7%), and PPL (down 4.7%) were among laggards.
According to the brokerage report, the market is expected to remain positive in the coming weeks, with circular debt developments and corporate results continuing to influence trends. The KSE-100 index is projected to maintain its upward trajectory, targeting 165,215 points by December 2025, 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.
