KSE-100 rally expected to sustain on IMF tranche, improved ratings: report

The upward momentum in the KSE-100 Index is likely to continue on the back of the IMF’s successful staff-level agreement for the second loan tranche, minimal flood-related impact, improved credit ratings by global agencies, and declining fixed income yields, AKD Securities said in its latest market outlook.

The brokerage firm said that the successful approval of 27th Amendment by majority in both lower and upper houses settled political uncertainty, driving the index up by 3,751 points in the last two trading sessions. Consequently, the benchmark index closed at 161,935 points on Friday, up 1.5% or 2,342pts during the week. 

The said positive outweighed the early-week bearish sentiment stemming from continued tensions between Pakistan and Afghanistan, as peace talks concluded without a resolution and Afghanistan announced a suspension of trade with and through Pakistan. 

Meanwhile, market participation weakened by 13.6% WoW with average daily traded volume down to 944 million shares, compared to 1.1 billion shares in the prior week. 

On the macroeconomic front, workers remittance during October 2025 clocked in at $3.4 billion, up 12% YoY. Alongside, inflows under the Roshan Digital Account stood at $250 million during October 2025, up 4.6% MoM. Moreover, auto sector sales clocked in at 20,985 units, up 38% YoY. 

Meanwhile, SBP held reserves increased by $22 million WoW, ending the week at $14.5 billion as of November 7. On the currency front, PkR appreciated by 0.04% WoW against the greenback during the week, closing the week at Rs280.7 against the US dollar. 

Other key developments during the week included Pakistan posting its highest quarterly budget surplus of PKR 2.1 trillion in 1QFY26, the IMF Executive Board’s scheduled approval of a $1.2 billion tranche on December 8, the government’s approval of a Letter of Comfort for a PKR 1.23 trillion circular debt resolution loan, Qatar’s willingness to divert 24 LNG cargoes in CY26, and the government awaiting IMF clearance to announce its first industrial policy.

Sector-wise, Jute, Woollen, Fertilizer, Textile Composite and Leather & Tanneries emerged as the top performers, rising 18.0%, 8.5%, 6.4%, 4.6% and 4.5% week-on-week, respectively. In contrast, Leasing Companies, Textile Weaving, Vanaspati & Allied Industries, Power Generation & Distribution, and Tobacco were the worst performers, declining 8.3%, 4.0%, 3.5%, 2.6% and 2.0% week-on-week.

In terms of flows, Mutual Funds and companies were the major net buyers, recording purchases of US$11.9 million and US$2.2 million, respectively, while foreigners were the largest net sellers with US$12.2 million in outflows. 

Company-wise, KTML (up 29.3% WoW), PIOC (up 26.5% WoW), MLCF (up 15.9% WoW), KOHC (up 9.1% WoW) and FFC (up 8.6% WoW) were the top gainers, whereas PABC (down 5.6% WoW), SEARL (down 5.4% WoW), KEL (down 4.9% WoW), ABL (down 4.2% WoW) and AGP (down 3.7% WoW) were the major laggards.

AKD Securities said investor sentiment is expected to strengthen further on the likelihood of foreign portfolio and direct investment inflows, supported by improved relations with the United States and Saudi Arabia. The brokerage added that the outlook is reinforced by limited alternative investment options and attractive valuations in local equities, with the KSE-100 trading at 7.6x earnings and offering a dividend yield of 6.8%.