PSX benchmark index declines amid volatility

Pakistan Stock Exchange (PSX) witnessed volatility during the week, 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.

Market participation also weakened by 17%WoW with average daily traded volume down to 1.8 billion shares as against 2.2 billion shares in the prior week.

On the macroeconomic front, current account for September 2025 reported a surplus of US$110 million. A point worth mentioning is, IT exports for September 2025 were reported at US$366 million, up 25%YoY, marking the highest ever monthly IT exports.

Power generation during September 2025 was reported at 12,592GWh, up 1%YoY, whereas cost of generation declined by 24%YoY.

Foreign exchange reserves held by State Bank of Pakistan (SBP) were reported at US$14.5 billion as of October 17, 2025.

According to AKD Securities, the momentum at PSX is expected to continue given successful staff-level agreement of the IMF’s second review, minimal flood impact and improved credit ratings by global agencies amid falling fixed income yields.

Investors’ sentiments are expected to further improve on the likelihood of foreign portfolio and direct investment flows, driven by improved relations with the United States 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 7.4x while offering a dividend yield of 6.6%.

The top picks of the brokerage house include: MEBL, MCB, HBL, OGDC, PPL, PSO, FFC, ENGROH, LUCK, DGKC, FCCL, and INDU.