The momentum in the Pakistan Stock Exchange (PSX) is expected to continue supported by a successful staff-level deal on the IMF’s second review, minimal flood impact and improved credit ratings by global agencies amid falling fixed income yields, according to a note by AKD Securities.
The firm notes that falling fixed income yields, coupled with the likelihood of foreign portfolio and direct investment flows, will further boost investor sentiment, especially given Pakistan’s improved relations with the US and Saudi Arabia.
The stock market remained volatile during the week ended on Friday, pressured by weaker than anticipated corporate earnings. The benchmark index declined by 502 points during the week, down 0.3% WoW, to close at 163,304 points, alongside market participation weakened by 17% WoW with average daily traded volume down to 1.8 billion shares, compared to 2.2 billion shares in the prior week.
On the macroeconomic front, the current account for September reported a surplus of $110 million, whereas IT exports in September 2025 clocked in at $366 million, up 25%YoY, marking the highest ever monthly IT exports. Moreover, power generation was reported at 12,592 GWh, up 1%YoY, whereas cost of generation declined by 24%YoY.
Meanwhile, SBP held reserves increased by $14 million WoW, ending the week at $14.5 billion as of October 17, 2025. On the currency front, the Pakistan rupee appreciated by 0.03% WoW against the greenback during the week, closing the week at Rs 281.0 per US dollar.
Other major news during the week included Pakistan and Vietnam setting a trade target of $3 billion, the SBP projecting GDP growth for FY26 to be below 4.25%, Russia proposing two options for the revival of Pakistan Steel Mills, foreign investors repatriating $752 million in Q1 (an 85.8% YoY increase), and the Ministry of Finance promising the sale of PIA and the issuance of Panda Bonds by the end of the year.
Sector-wise, Jute, Leather & Tanneries, Tobacco, Miscellaneous, and Modarabas were among the top performers, with week-on-week (WoW) increases of 5.3%, 5.2%, 4.5%, 4.4%, and 4.0%, respectively. Conversely, Power Generation & Distribution, Refinery, Woollen, Transport, and Closed-End Mutual Funds were the worst performers, seeing declines of 10.3%, 7.1%, 4.3%, 4.2%, and 3.2% WoW, respectively.
Regarding market flow, the largest net selling was recorded by foreign investors and mutual funds, with a net sell of US$7.09 million and US$3.69 million, respectively. On the other hand, individuals absorbed much of the selling, with a net buy of US$12.03 million.
Company-wise, the top performers during the week included PSX (up 18.9% WoW), AIRLINK (up 12.2% WoW), PSEL (up 10.8% WoW), NATF (up 10.8% WoW), and SEARL (up 8.4% WoW). The top laggards were KEL (down 23.8% WoW), PKGP (down 14.4% WoW), KAPCO (down 8.1% WoW), BAHL (down 7.5% WoW), and FFL (down 7.2% WoW).
The brokerage firm added that its positive 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 7.4x and offering a dividend yield of 6.6%, local equities are seen as an appealing investment opportunity.
