The Pakistan Stock Exchange (PSX) is poised to continue its upward trajectory, driven by key factors such as the successful completion of the IMF’s second review of Pakistan’s fiscal performance under the $7 billion Extended Fund Facility (EFF), limited impact from recent floods, and improved credit ratings, according to AKD Securities’ weekly market review.
“We foresee the momentum in the KSE-100 to continue given smooth completion of IMF 2nd review, minimal flood impact and improved credit ratings by global agencies amid falling fixed income yields,” the brokerage said in its outlook.
The market maintained its bullish momentum during the week, driven by investor confidence following the historic meeting between the Prime Minister and the US President at the Oval Office.
The benchmark index advanced by 6,733 points, a 4.1% week-on-week (WoW) increase, closing at a historic high of 168,990 points. However, market participation weakened by 19.8% WoW, with the average daily traded volume dropping to 1.8 billion shares, compared to 2.2 billion shares the prior week.
On the macroeconomic front, inflation for September 2025 clocked in at 5.6% year-on-year (YoY), marking the highest level in the past 10 months, largely due to recent flooding. As a result, yields on 1-, 3-, 6-, and 12-month Treasury bills in the last auction increased by 41, 20, 21, and 19 basis points, respectively, reflecting investor expectations that the policy rate will remain unchanged in the near term. Moreover, the trade deficit for September 2025 widened to $3.3 billion, compared to a deficit of $2.3 billion in the same period last year.
In the cement sector, offtakes for September 2025 stood at 4.25 million tons, up 7% YoY, driven by a 14% YoY surge in domestic sales. Additionally, offtakes for the oil marketing companies (OMC) sector in September 2025 reached 1.4 million tons, an 8% YoY increase. On the currency front, the Pakistani Rupee (PKR) appreciated by 0.04% WoW against the US dollar, closing the week at 281.26 PKR/USD.
Sector-wise, Commercial Banks, Fertilizer, Refinery, Vanaspati & Allied Industries, and Transport were the top performers, up 9.3%, 7.7%, 7.4%, 6.6%, and 5.8% WoW, respectively. On the other hand, Modarabas, Jute, Textile Spinning, Close-end Mutual Funds, and Textile Composite saw declines of 3.3%, 3.1%, 3.1%, 3.0%, and 2.7% WoW, respectively.
In terms of flow, major net buying was recorded by Mutual Funds and Individuals with a net buy of $47.9 million and $34.3 million, respectively. On the other hand, Insurance, Companies, and Banks/DFIs were the highest sellers, with a net sell of $30.3 million, $21.9 million, and $19.2 million, respectively.
Company-wise, the top performers of the week were BOP (up 24.9% WoW), SAZEW (up 15.1% WoW), FABL (up 13.9% WoW), YOUW (up 13.5% WoW), and FATIMA (up 13.4% WoW). Meanwhile, the top laggards were HUMNL (down 11.5% WoW), NPL (down 10.6% WoW), RMPL (down 6.6% WoW), MTL (down 6.4% WoW), and PIOC (down 5.7% WoW).
According to AKD Securities, investor sentiment is expected to further improve on the likelihood of foreign portfolio and direct investment flows, driven by improved relations with the US and Saudi Arabia. This outlook is supported by the lack of alternative investment avenues and the attractive valuation of local equities, with the KSE-100 trading at a multiple of 8.8x while offering a dividend yield of 6.7%.
