PSX benchmark index up 2.0%WoW

Pakistan Stock Exchange (PSX) was supported by strong corporate earnings and Moody’s upgrade of deposit ratings for Pakistani banks, while demonstrating weakness later on in the week due to political noise. The benchmark index touched an all-time high of 151,262 points, but closed the week at 149,493 points, up 2.0%WoW.

Market participation rose 31%WoW to 790 million shares, from 606 million shares a week ago.

On the macroeconomic front, Pakistan posted a current account deficit of US$254 million as compared to a deficit of US$348 million during the same period last year.

IT exports for July 2025 increased by 24%YoY to US$354 million, from US$286 million during the same period last year.

LSM index witnessed an increase of 4.1%YoY in June 2025, resulting in FY25 declining by 0.7%YoY.

As regards sectoral developments, urea fertilizer offtakes moderated by 1%YoY during July 2025, mainly due to weak farm economics and higher phosphate prices.

Foreign exchange reserves held by State Bank of Pakistan (SBP) increased by US$13 million to US$14.3 billion as of August 15, 2025. As a result, PKR appreciated for the 5th consecutive week against the greenback.

Other major news inflows during the week included: 1) ADB to promises to provide US$410 million package for Reko Diq copper and gold mines, 2) Chinese Foreign Minister, Wang Yi arrives in Islamabad on three-day visit, 3) July 2025 FDI rises 7%YoY to US$208 million, 4) Tehran agrees raising trade with Pakistan to US$10 billion, and 5) GoP slashes high-speed diesel while leaving petrol price unchanged.

REITs, Leather & Tanneries, and Transport were amongst the top performing sectors, while Vanaspati & allied industries, Close-end Mutual funds, and Chemical sectors among the laggards.

Major selling was recorded by Foreigners and Banks/DFIs with a net sell of US$21.6 million. Mutual Funds and Companies absorbed most of the selling with a net buy of US$24.7 million.

Top performing scrips of the week were: KOHC, SEARL, BAHL, THALL, and MUGHAL, while the laggards included: PGLC, PKGP, HUMNL, YOUW, and NESTLE.

According to Pakistan’s leading brokerage house, 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.

The benchmark index is anticipated to sustain its upward trajectory, with a target of 165,215 points by end 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.

Top picks of the brokerage house include: OGDC, PPL, PSO, FFC, ENGROH, MCB, FCCL, INDU, and SYS.