Bangladesh becoming “Panipat ka maidan”

Despite formidable odds, Bangladesh managed to script an enviable economic story over the past decade. Consistent GDP growth, export-led industrialization anchored by the ready-made garments sector, improving social indicators, and relative macroeconomic stability placed the country among Asia’s fastest emerging economies. Ironically, this very success appears to have turned Bangladesh into a theatre for competing global and regional ambitions.

Much like Panipat in South Asian history—where decisive battles were repeatedly fought by rival powers—Bangladesh is increasingly being reduced to a battleground for influence rather than a partner in prosperity. India, the United States, China and Russia have all attempted to secure strategic leverage in Dhaka. Each power has pursued its own interests, but none has prioritized long-term economic stability for the country itself.

The United States’ regime-change initiative ultimately succeeded. However, Washington’s engagement has remained narrowly political. Unlike past global interventions that at least carried economic reconstruction frameworks, there is no visible recovery plan, stabilization package or trade-driven agenda for Bangladesh. Regime change, without an accompanying economic roadmap, has only amplified uncertainty.

India continues to view Bangladesh largely through a strategic and security lens, while China’s engagement remains infrastructure-focused, tied to connectivity and supply chains. Russia’s role is limited and transactional. Yet none of these actors has articulated a comprehensive, people-centric recovery strategy for a nation now facing political paralysis.

The recent killing of a student leader has pushed the country into a state of standstill. Historically, student movements have been central to Bangladesh’s political evolution. Today, unrest is unfolding amid intense geopolitical rivalry risks prolonged instability. Investor confidence is weakening, export momentum is under pressure, and economic continuity is increasingly fragile.

The irony is unmistakable. Every power eager to influence Bangladesh shows little willingness to assume responsibility for economic recovery. Bangladesh does not need to become another Panipat—where outcomes are dictated by external forces and costs borne by the local population. Without a credible recovery plan rooted in stability and economic continuity, this power contest will exact a heavy price from the Bangladeshi people.

Iranian efforts to improve relations with Afghanistan

Iran will make every effort to give fresh impetus to its interactions with Afghanistan along the border. Masoud Pezeshkian made the comment in a televised address to the people at the close of his trip to the eastern Iranian province of South Khorasan, which borders Afghanistan.

“Many of the needs could be met, and this is possible,” he explained.

He said the provincial governor has been authorized to expedite engagement with neighboring Afghanistan.

Iran’s trade volume with Afghanistan is currently described as decent by economic reports, with Tehran investing significant effort into maintaining commerce since the Afghan government was toppled in 2021. The Taliban, who were ousted by US forces in 2001 and faced a 20-year occupation, swiftly returned to power following the American withdrawal. 

Since then, the new rulers have managed to improve security, with terrorist attacks becoming less frequent. Yet, the country remains burdened by the remnants of the occupation, facing escalating poverty and unemployment.

Although trade continues, Iran has yet to officially recognize the Taliban. Tehran remains at odds with the group over a host of issues, including the withholding of Iran’s water rights from the Hirmand River, the ongoing influx of refugees, and the lack of inclusivity within the new government. Nevertheless, Iranian officials have kept their embassy in Kabul active and continue to engage in regular discussions with Taliban leadership.

Tehran has also been working to establish deeper ties between the Taliban and Afghanistan’s other neighbors, none of whom have officially recognized the group’s government. 

To this end, Iran hosted a meeting in Tehran last week involving representatives from Afghanistan’s neighboring countries and Russia. During the summit, Iranian Foreign Minister Abbas Araghchi emphasized the significance of stability and security, noting that Afghanistan’s integration into the region would be mutually beneficial. He described Afghanistan as possessing unique human, economic, and natural potential, historically serving as a bridge between neighboring regions.

Afghanistan’s relationship under the Taliban has been specially friction-ridden with Pakistan. The two countries engaged in a brief military conflict earlier this year; while a ceasefire is currently in effect, it is widely considered to be fragile.

 

PSX: 7 IPOs worth PKR4.3 billions issued during 2025

The Pakistan Stock Exchange (PSX) witnessed momentum in initial public offering (IPO) activity during 2025, with a total of 7 offerings recorded during the year, including two GEM Board listings and one migration. This momentum mirrors 2024, when the bourse also hosted seven IPOs, underscoring sustained capital market activity.

The total amount raised from investors through the 7 offerings (including migration) in 2025 aggregated to PKR4.3 billion as against PKR8.4 billion last year. Despite the lower quantum of funds raised, investor appetite remained robust, as all offerings were oversubscribed, reflecting strong market enthusiasm.

This sustained IPO momentum is largely a continuation of last year’s trend, driven by macroeconomic stability under the IMF programme, improving investor confidence, positive equity market sentiment, and a declining interest rate environment.

The benchmark Index surged significantly by 47.9% in PKR terms and 47.1% in US$ terms in 2025 to date, reflecting overall positive sentiment and renewed investor interest.

The average daily traded volume has also increased by 40%, reaching 797 million shares, while the daily traded value has risen by 64% to PKR36.6 billion during 2025 to date.

In 2025, new listings on the main board included Zarea Limited (ZAL), Barkat Frisian Agro Limited (BFAGRO), Image REIT (IRIET), and Pak Qatar Family Takaful (PQFTL). There was one migration of BlueEx from GEM Board to Main board while two companies were added to GEM board which are Nets International Communication (GEMNETS) and Pakistan Credit Rating Agency (GEMPACRA). To highlight, out of 4 main board listing, Topline was advisor in 2 listing in 2025.

In terms of performance, ZAL was the best-performing IPO in 2025, delivering a return of 202% in 2025TD, in which topline was the advisor.

The global IPO market has also gained momentum. According to Ernst & Young (E&Y), a total of 914 IPOs were recorded through 9M2025, raising US$110 billion, as compared to 870 IPOs that raised US$78 billion during the same period last year. The growth in IPO activity is primarily driven by larger deal sizes, supported by robust equity markets, monetary easing, and more accommodative financial conditions. Despite ongoing geopolitical and macroeconomic uncertainties, investor sentiment continues to improve. Geopolitical risk is increasingly being viewed as part of the “new normal”—a persistent backdrop to market dynamics rather than a one-off shock.

Topline Securities expects IPO activity in 2026 to remain strong compared with the current year, supported by a healthy pipeline of offerings, improving economic conditions, and a lower interest rate environment.

In mainboard, 4 companies raised funds through IPO. These companies represented various sectors including Technology, Food & Personal Care, Real Estate Investment, and Insurance.

Zarea Limited (ZAL):

Zarea is one of leading digital technology company specializing in the commodity trading market of Pakistan. The primary purpose of the IPO is to achieve growth by increasing their customer base and improving the user interface of its online platform. For this purpose, company is raising money to meet their working capital needs, establish its own logistic fleet, upgrade it online platform etc. The company offered 62.5 million shares at strike price of PKR16.5/ share, raising PKR1,031 million in February, 2025 with an oversubscription of 1.9x.

Barkat Frisian Agro Limited (BFAGRO): 

BFAGRO is the Pakistan’s only producer of pasteurized egg products. It is a Pakistan-Dutch Joint venture between Buksh Group and Frisian Egg International B.V. which is Dutch company. Company raised funds to setup new facility in Faisalabad which will increase production capacity by 12,000 tons totaling to 29,000. This expansion will enable the company to explore new export opportunities and target new customers in the local market. The company offered 67.7 million shares at strike price of PKR18.2/ share, raising PKR1,232 million in February, 2025 with an oversubscription of 16.25x.

Image REIT (IREIT): 

Image REIT is hybrid REIT scheme having both Rental and Developmental Component managed by Sino link RMC. The principal activity of IREIT is to invest directly in real estate assets with the objective of generating sustainable income and long-term returns for investors through rental income, capital appreciation, and value creation. The principal purpose of the Issue is to raise funds to complete the construction of the Developmental Component. The company offered 92.0 million shares at a strike price of PKR10.0/ share, raising PKR921 million in September, 2025 with an oversubscription of 2.1x.

Pak Qatar Family Takaful (PQFT): 

Pak Qatar Family Takaful Limited (PQFTL) is Pakistan’s largest dedicated family takaful company which offers comprehensive Takaful and investment solutions. The company raised funds to be utilized for: 1) Expansion of Digital Footprint, 2) Strengthening Solvency and Enhancing Underwriting Capacity, and 3) Compliance with Minimum Paid-up Capital requirements. The company offered 50 million shares at strike price of PKR18.0/ share, raising PKR901 million in December, 2025 with an oversubscription of 3.2x.

 

PSX benchmark index closes at highest ever 171,960 level on Thursday

Pakistan Stock Exchange (PSX) continued its bullish momentum during the week ended on December 19, 2025. The benchmark index achieved its highest ever closing on Thursday, at 171,960 points, witnessed some profit taking on Friday, closing the week at 171,404 points, up 1,539 points or 0.91%WoW. Market participation weakened by 5.6%WoW with average daily traded volume down to 1.2 billion shares, from 1.3 billion shares in the prior week.

Investors’ optimism was boosted following the announcement of a surprise 50bps rate cut by the State Bank of Pakistan (SBP), as against market’s anticipation of status quo. Sentiments were further boosted after current account recorded a surplus of US$100 million for November 2025.

On the macroeconomic front, Textile exports for 5MFY26 increased by 3%YoY to US$7.8 billion, whereas, Petroleum imports declined by 2%YoY to US$6.4 billion.

Foreign exchange reserves held by SBP increased by US$1.3 billion to US$15.9 billion as of December 12, 2025 after receiving IMF’s disbursement under the EFF and RSF.

Other major news flow during the week included: 1) Finance Minister rules out mini budget; insists revenue gap to be met via tax compliance, 2) Pakistan and Uzbekistan agree to extend PTA, 3) Pakistan seeks oil deal with Russia, 4) SIFC prioritizes brownfield refinery upgrades, and 5) Pakistan, China advance talks on US$2.2 billion industrial complex at Port Qasim.

Jute, Real Estate Investment Trust, Commercial Banks, Close – End Mutual Fund and Engineering were amongst the top performing sectors, while Woollen, Modarabas, Synthetic & Rayon, Textile Spinning and Vanaspati & Allied Industries were amongst the laggards.

Major buying was recorded by Individuals with a net buy of US$16.7 million, while foreigners and Insurance were major sellers with net sell of US$12.7 million and US$8.2 million, respectively.

Top performing scrips of the week were: RMPL, PIBTL, NBP, UBL, and DCR, while laggards included: SSGC, BNWM, PIOC, IBFL, and PGLC.

AKD Securities foresees the momentum in the benchmark index to continue given successful third tranche disbursement under the EFF & RSF, monetary easing environment, 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, at a multiple of 8.1x while offering a dividend yield of 6.5%.

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

Trump Keen on Turning Gaza into His Personal Property

Nothing has been more destructive for Gaza over the past two years than the bombs dropped with unwavering Western backing. Yet nothing has been more cynical than Donald Trump’s repeated appearances promoting his so-called “peace plan” for the besieged Strip. Wrapped in the language of diplomacy, Trump’s proposal reeks not of reconciliation but of ownership—an attempt to treat Gaza as a geopolitical asset to be managed, traded, and reshaped according to American convenience.

While Trump speaks of calm and reconstruction, Israeli aggression continues almost daily, violating ceasefire understandings with impunity. Washington, far from being an honest broker, remains the principal enabler—arming, financing, and diplomatically shielding Israel while performing concern for Palestinian suffering. Trump’s rhetoric cannot conceal this contradiction. Peace cannot be brokered by those underwriting the war.

As large-scale bombing subsided, a new phase of pressure emerged. Gaza became the subject of maps, crossings, donor conferences, and discussions about “the day after.” Central to this discourse is the idea of a “peace council,” international forces, and a transitional governing arrangement imposed from outside. These proposals move slowly because they are designed not to end occupation, but to recycle Western control while avoiding a frank admission of failure.

Trump’s plan—Israeli withdrawal in exchange for Hamas’s removal, followed by an internationally supervised administration—lays bare a colonial mindset. Gaza is reduced to a problem to be solved, not a people with rights. Palestinians are expected to accept a future negotiated in Washington, as if sovereignty were a favor Trump can dispense. The voices of those who endured siege and destruction are conspicuously absent.

What drives Trump’s sudden peace enthusiasm is not compassion but damage control. After a prolonged and devastating war, Israel failed to impose its will militarily, exposing the limits of US-backed force. The myth of invincibility collapsed, and global opinion shifted sharply. Trump now seeks to repackage defeat as diplomacy, positioning himself as a peacemaker while rescuing a deeply tarnished ally.

Reconstruction, under this framework, becomes another weapon. Aid is offered conditionally, tied to disarmament and political submission. This transactional logic—treating freedom as a commodity—has failed everywhere it has been tried, from Iraq to Afghanistan.

Gazans refuse to be reduced to property or a bargaining chip. Their resistance has transformed from a marginal humanitarian case into a global symbol exposing Western hypocrisy. Trump may imagine himself redesigning the region, but Gaza stands as a reminder that peace imposed through power, money, or arrogance is not peace at all.

Venezuela: US Regime Change Obsession

The seizure of Venezuelan oil tankers by the United States is not an isolated enforcement action; it is the logical extension of a failed regime-change project. Having been unable to dislodge the Maduro government through sanctions, diplomatic pressure, and political engineering, Washington has doubled down on economic warfare—this time by targeting Venezuela’s sole economic artery.

Venezuela is not a diversified economy. Oil exports generate the bulk of its foreign exchange, fund public services, and pay for essential imports. Intercepting tankers is therefore not about legal compliance; it is about choking the economy into submission. When financial strangulation is designed to produce political collapse, it crosses from diplomacy into coercion—what many rightly describe as economic terrorism.

The justification offered by Washington is familiar - sanctions are portrayed as tools to restore democracy and punish alleged wrongdoing. Yet the outcomes tell a different story. Years of sanctions have neither produced regime change nor improved governance. Instead, they have devastated living standards, disrupted fuel supplies, and weakened healthcare and food security. Political elites adapt; ordinary citizens absorb the shock.

More troubling is the international silence. The seizure of commercial shipments bound for third countries raises serious questions under international law, yet few Western capitals have voiced concern. This selective outrage exposes a deeper truth, rules-based order often bends when great power interests are involved. Actions condemned as piracy if undertaken by rivals are quietly normalized when executed by Washington.

There is also a broader pattern at play. From Iran to Venezuela, energy-producing states that resist US strategic preferences face sanctions, asset freezes, and trade blockades. The message is unmistakable - control over energy flows remains central to geopolitical power. Democracy rhetoric provides cover, but energy dominance appears to be the underlying driver.

Ironically, such pressure often entrenches the very systems it claims to oppose. Economic siege fuels nationalism, strengthens hardliners, and closes political space. It also pushes targeted states toward alternative trading networks, accelerating the fragmentation of the global economic order—an outcome that ultimately weakens US influence rather than consolidates it.

For Venezuela, continued economic suffocation offers no path to stability or reform. For the world, accepting unilateral seizures as normal practice sets a dangerous precedent. If regime change pursued through economic destruction becomes an accepted tool of statecraft, global trade itself becomes hostage to power politics.

History suggests a simple lesson: coercion may punish, but it rarely persuades.

Gold March Toward US$5,000: A New Reality

Gold’s surge in 2025 — the strongest since the 1979 oil shock — would normally invite calls for a painful correction. Prices have doubled in two years. Yet this rally is not built on speculative froth alone. It is anchored in a structural shift that could carry bullion to US$5,000 an ounce by 2026.

Spot gold touched a record US$4,381 in October, crossing milestones once thought distant. The drivers are neither exotic nor temporary - persistent US fiscal deficits, an implicitly weak-dollar posture, geopolitical fractures from Ukraine to NATO’s eastern flank, and rising unease over the Federal Reserve’s independence. In such an environment, gold is not merely a hedge — it is a statement of mistrust in paper promises.

What distinguishes this cycle is the role of central banks. For five consecutive years, they have been diversifying away from dollar assets, stepping in when investor positioning becomes stretched and prices wobble. This behavior places a firm floor under gold, resetting its trading range far higher than in previous cycles.

JP Morgan estimates that while 350 tons of quarterly demand keeps prices stable, actual buying may average 585 tons per quarter in 2026 — a telling imbalance.

Investors are following suit. Gold allocations have risen to 2.8% of total assets, up from 1.5% before 2022 — elevated, but hardly extreme given the scale of global uncertainty.

Forecasts from Morgan Stanley, JP Morgan and Metals Focus converge on the same conclusion, US$5,000 gold is no longer sensational. It is increasingly plausible. The real question is not how high gold can go, but how fragile confidence in fiat currencies has become.

Why Trump Is Edging Toward a Serious Conflict with Venezuela?

US President Donald Trump has significantly escalated pressure on Venezuela and President Nicolás Maduro through sanctions, military action, and economic measures, raising concerns about a potential serious conflict. The latest flashpoint was the US seizure of a sanctioned oil tanker en route to Cuba, part of a broader campaign targeting Maduro’s government, which Washington labels illegitimate and accuses of leading a drug-trafficking network.

Trump has justified his actions on multiple fronts. Migration is a central issue, with the president frequently blaming Maduro for sending criminals, gang members, and former prisoners into the United States. While Venezuelans now number around 770,000 in the United States as of 2023, they represent less than 2 percent of the immigrant population. Most Venezuelan migrants—over 80 percent—remain in Latin America and the Caribbean. Nonetheless, the issue has gained urgency after a Supreme Court ruling led to more than 250,000 Venezuelans losing Temporary Protected Status following the program’s expiration.

Drug trafficking is another pillar of Trump’s campaign. The administration accuses the Maduro regime of facilitating narcotics flows into the US, citing this as justification for lethal strikes on suspected drug-smuggling boats near Venezuela. Since September, US forces have carried out at least 22 maritime strikes, killing dozens of alleged traffickers. These actions have sparked political controversy, particularly after reports that survivors of one strike were killed. While the administration claims these operations have sharply reduced maritime drug trafficking, lawmakers note that the vessels were believed to be carrying cocaine, not fentanyl, and that Colombia remains the region’s top cocaine producer.

Economic pressure, especially targeting oil, has intensified tensions. Oil accounts for nearly 90 percent of Venezuela’s export revenues. The seized tanker reportedly carried over one million barrels of oil, and analysts warn that continued seizures could amount to a de facto naval blockade, crippling Venezuela’s economy and limiting its ability to import food, weapons, and fuel.

Finally, regime change remains an underlying concern. Trump has said Maduro’s days are “numbered” and has deployed an unprecedented US military presence in the region, though he has not ruled out negotiations. Senior officials deny seeking regime change outright, but skepticism remains over whether any agreement with Maduro could be enforced.

PSX: Average daily traded volume up 49.5%WoW

Pakistan Stock Exchange (PSX) continued its bullish momentum during the week, driven by investor optimism following the announcement of IMF Executive Board approval, for the third tranche of US$1.0 billion under EFF and US$200 million under RSF for Pakistan. Sentiments were further boosted after ECC’s decision to adjust OMC and dealer margins on MS and HSD based on national CPI, capped between 5-10% and Incremental electricity package announced by government for industries and agriculture. The benchmark index gained 2,779 points during the week, up 1.7%WoW, to close at an historic high of 169,865 points.

Market participation strengthened by 49.5%WoW with average daily traded volume up to 1.3 billion shares, from 863 million shares in the prior week.

On the macroeconomic front, Workers’ Remittances for November 2025 were reported at US$3.2 billion, up 9%YoY.

Auto sector sales for November 2025 witnessed a surge of 41% YoY, to 19,635 units.

Foreign exchange reserves held by State Bank of Pakistan (SBP) increased by US$12 million to US$14.6 billion as of December 05, 2025. PKR appreciated by 0.04%WoW against the greenback during the week to 280.32 PKR/ US$.

Other major news flow during the week included, 1) ADB okays loan for Karachi-Rohri section, 2) Reko Diq’s US$7 billion deal deepens Pakistan-US economic links, 3) GoP clears PKR659.6 billion power debt, 4) Cabinet approves diversion of 45 LNG cargoes, and 5) Revenue collection grows 27%YoY to PKR12 trillion during FY25.

Textile Spinning, Engineering, Synthetic & Rayon, Textile Composite and Glass & Ceramics were amongst the top performing sectors, while Leather & Tanneries, Jute, Leasing Companies, Refinery and Vanaspati & Allied Industries were amongst the laggards.

Major buying was recorded by Mutual Funds with a net buy of US$22.7 million. Insurance Companies were major sellers with net sell of US$22.6 million.

Top performing scrips of the week were: NML, KAPCO, MLCF, ISL, and LOTCHEM, while laggards included: SRVI, HUMNL, TRG, HINOON, and SAZEW.

AKD Securities foresees the momentum in the benchmark index to continue given successful third tranche disbursement under the EFF & RSF, 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.

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

Deteriorating US-Venezuela relations: From Reliable Crude Supplier to Adversary

For decades, Venezuela was among the most dependable suppliers of crude oil to the United States. The relationship was commercially stable and strategically important. Venezuelan heavy crude suited US Gulf Coast refineries, and American demand guaranteed steady revenues for Caracas.

The shift began with the election of Hugo Chávez in 1999, which marked the start of a new ideological era. His government moved sharply away from the earlier market-aligned policies and adopted a confrontational posture toward Washington. This included expropriating foreign oil assets, reorganizing PDVSA under political control, and forging alliances with Cuba, Russia, Iran, and later China. These steps weakened commercial ties and deepened political tensions.

Venezuela’s oil sector also deteriorated due to nationalization, mismanagement, and underinvestment. Production, once above 3 million barrels per day, fell sharply over the next two decades. As quality and reliability declined, US refiners increasingly turned to Canada, Mexico, and domestic shale producers.

Washington responded to Venezuela’s political trajectory—especially under Nicolás Maduro—by imposing sanctions targeting individuals, the oil sector, and financial transactions. These sanctions further reduced the scope for commercial cooperation and pushed Venezuela to redirect crude flows toward China and other alternative buyers. The result is a relationship now defined by distrust rather than the interdependence of earlier decades.

A parallel concern for the United States has been narcotics trafficking in the region. While Venezuela is not a major cocaine producer, it has become a significant transit route between Colombia and global markets.

US agencies have accused certain Venezuelan officials of collusion with organized crime groups. At the same time, the United States faces a domestic drug crisis driven by opioids, fentanyl, and synthetic narcotics entering through regional networks. This has elevated drug trafficking to a major political issue.

Against this backdrop, President Donald Trump’s emphasis on securing access to strategic crude supplies and cracking down on narcotics networks reflects a broader domestic and geopolitical agenda.

Energy security, border control, and regional influence remain high-priority themes in US politics. Venezuela, given its oil reserves and its role in regional trafficking routes, has become central to these debates, turning a once-pragmatic partnership into a deeply strained relationship.

Pakistan must add Gold Backed Funds

Pakistan’s financial regulators often speak of diversification, innovation, and deepening of markets — yet these ambitions rarely translate into actionable reforms. One opportunity stands out, both practical and low-risk, and yet remains untouched - the introduction of gold-backed funds. With the State Bank of Pakistan (SBP) holding nearly 50 tons of gold in its reserves, the country is well-positioned to convert a fraction of its dormant assets into market-enabling financial instruments.

Global central banks have already moved in this direction. In dozens of jurisdictions, gold is no longer treated as a static reserve item but as a strategic financial asset supporting exchange-traded funds (ETFs) and structured investment products. Pakistan, in contrast, keeps its bullion locked away — valuable, but economically inactive. This conservative mindset needs a calibrated rethink.

The proposal is simple and regulator-friendly. State Bank of Pakistan (SBP) should release 100 kilograms of gold through the Pakistan Mercantile Exchange (PMEX), specifically targeting the creation of gold-backed ETFs. The quantity is symbolic when compared to total reserves; it carries no threat to reserve adequacy. But its impact on market depth, investor confidence, and product diversity would be significant. SBP-verified bullion sold through PMEX would enhance transparency, improve price discovery, and finally allow Pakistan to list a credible gold-backed fund in its financial ecosystem.

Once the ETF market is seeded, SBP should gradually import around 150 kilograms of gold, timed with favorable global prices. This ensures reserves are not only restored but increased, allowing for future expansion of gold-based investment products. The goal is to create a sustainable, market-driven cycle — not a one-off intervention.

For regulators, the benefits are clear. Gold-backed funds broaden the investment menu in a market dominated by government securities. They attract new investor segments, document savings that would otherwise sit in unreported physical gold, and add liquidity to PMEX. More importantly, they align Pakistan with global best practices, where commodity-based financial products are now standard tools for stabilizing markets.

The concern that releasing central-bank gold might destabilize reserves is misplaced. A 100-kilogram sale out of a 50-ton stock is hardly a depletion; it is prudent activation of an underutilized asset. Paired with a planned replenishment strategy, the initiative strengthens rather than weakens Pakistan’s reserve position.

Pakistan’s financial system suffers from chronic concentration, limited innovation, and excessive reliance on debt instruments. Gold-backed funds offer a low-risk, high-credibility avenue for reform — one that regulators can implement without disrupting monetary policy or fiscal planning.

It is time to stop treating gold as an untouchable relic of reserve management. If Pakistan truly wants deeper, more diversified capital markets, then adding gold-backed funds is no longer optional — it is need of the time.

 

China backs expanding Iran-Saudi ties

Iran, China, and Saudi Arabia have wrapped up their third Trilateral Committee Meeting, with Beijing once again underscoring its commitment to strengthening relations between Tehran and Riyadh.

The meeting was held Tuesday at Iran’s Foreign Ministry in Tehran and was chaired by Iranian Deputy Foreign Minister Majid Takht-Ravanchi. Saudi Deputy Foreign Minister Walid al-Kharaji and China’s Deputy Foreign Minister Miao Deo also took part.

During the session, the three sides issued a joint statement outlining key commitments and recent progress.

They reaffirmed Iran and Saudi Arabia’s dedication to fully implementing the 2023 Beijing Agreement, the China-brokered deal that restored diplomatic ties between the two nations. Both countries stressed the importance of upholding sovereignty, territorial integrity, independence, and security in line with the UN Charter, the Charter of the Organization of Islamic Cooperation (OIC), and international law.

The statement also praised China’s “continued positive role” in facilitating dialogue and overseeing the agreement’s implementation.

For its part, China reiterated its willingness to support and encourage further cooperation between Tehran and Riyadh in political, economic, cultural, and security areas.

The joint statement highlighted progress in consular coordination, noting that this cooperation helped ensure the safe travel of more than 85,000 Iranian Hajj pilgrims and over 210,000 Umrah pilgrims in 2025.

It also welcomed the expanding exchanges between Iranian and Saudi research centers, universities, media outlets, and cultural institutions.

Addressing regional issues, the three countries called for an immediate end to Israeli military operations in Palestine, Lebanon, and Syria, and condemned violations of Iranian sovereignty.

Iran’s representative expressed appreciation for the steadfast support shown by Saudi Arabia and China during Israel’s June aggression against Iran.

The parties further reaffirmed their backing of a comprehensive, UN-led political solution in Yemen.

Iran and Saudi Arabia restored diplomatic ties in March 2023 after a seven-year break, following a China-mediated agreement that led to the reopening of embassies.

Earlier rounds of the trilateral committee were held in Beijing and Riyadh, where all sides restated their commitment to respecting sovereignty and non-interference, and acknowledged China’s ongoing mediation in support of regional dialogue.

 

Pakistan Plunging Deeper into Debt Trap

If 2025 has revealed anything, it is the alarming disconnect between Pakistan’s economic reality and the self-congratulatory narratives pushed by its policymakers.

The year has passed without a single meaningful breakthrough—no new productive units, no serious investment in balancing, modernization or replacement (BMR), and no expansion in industrial capacity. The economy is drifting, yet those responsible for steering it remain disturbingly complacent.

The import bill tells a story of its own. A 15 percent surge in imports exposes how deeply dependent the country has become on everything from basic raw materials to high-end consumer goods. Simultaneously, a 5 percent decline in exports reflects both declining competitiveness and an industrial sector gasping for breath. This is not a temporary imbalance; it is a structural failure in the making, now accelerating under an administration that mistakes cosmetic measures for policy.

Instead of responding with urgency, Pakistan’s economic managers have taken refuge in denial. They continue celebrating short-term dollar inflows as if these lifelines represent real progress. Their strategy—if it can be called one—rests entirely on IMF bailouts, emergency loans from friendly countries, and repeated rollovers of past obligations. This is not economic management; it is firefighting with borrowed water.

Worst of all, there is no sign of strategic thinking. No national plan for industrial revival, no push for technological upgrading, no attempt to diversify exports, and no investment in productivity. The economy is being held together by ad hoc decisions, political gimmicks, and a misplaced belief that stabilization alone can substitute for growth.

Pakistan is not suffering from a lack of options; it is suffering from a lack of seriousness. Nations facing crises reform their energy sectors, modernize their agriculture, incentivize manufacturing, and push for export-oriented growth. Pakistan, by contrast, has spent 2025 celebrating marginal improvements while ignoring the collapse taking place beneath the surface.

With rising imports, shrinking exports, stagnant industries and policymakers lost in complacency, the direction is painfully clear, Pakistan economy is plunging deeper into debt trap.

PSX benchmark index closes almost flat

Pakistan Stock Exchange (PSX) gained 408 points or 0.24%WoW to closing at 167,086 points on Friday, December 05, 2025. The appointment of Field Marshal Asim Munir as Chief of Defense Forces and the extension in maturity of Saudi Arabia’s US$3.0 billion deposit helped settle mid-week volatility.

Market participation dropped by 22%WoW due to volatility, with average daily traded volume declining to 863 million shares from 1.1 billion shares in the prior week.

On the external front, trade deficit widened by 33%YoY to US$2.9 billion in November 2025, driven by 5%YoY increase in imports and 15%YoY decline in exports.

Headline inflation remained in line with expectations at 6.1%YoY for November 2025.

Cement and E&P contributed the most to index’s gains, while cement sector rallied on the back of 2% YoY growth in local dispatches and LUCK’s foreign expansion announcement, while E&P sector advanced as LNG diversion plan progressed and the auction of offshore blocks attracting Turkish investment.

Foreign exchange reserves held by State Bank of Pakistan (SBP) increased by US$14 million to US$14.6 billion as of November 28, 2025.

Other major news flow during the week included: 1) Petroleum product sales drop 10% YoY in November, 2) FBR faces PKR143 billion shortfall in achieving November 2025 target, 3) Refinery upliftment jumps 40%YoY in November, 4) Wheat sowing likely to beat target in Punjab, and 5) Business confidence rises to 22%, as per OICCI.

Inv. Banks/ Cos, Refinery, and Cement were amongst the top performing sectors while, Automobile parts & assembler, Textile spinning, and Fertilizer were among the laggards.

Major buying was recorded by Individuals and Mutual Funds with a net buy of US$17.8 million and US$12.0 million, respectively. On the other hand, Insurance and Foreigners were major sellers with net sell of US$32.4 million and US$9.7 million, respectively.

Top performing scrips of the week were: BNWM, PTC, SRVI, PIOC, and TRG, while laggards included: THALL, AICL, HUMNL, HGFA, and FHAM.

According to AKD Securities the momentum in the benchmark index of PSX is likely to continue given successful IMF Executive Board approval of the IMF’s second review, minimal flood impact and improved credit ratings by global agencies amid falling fixed income yields.

Investors’ sentiment 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 also supported by the lack of alternative investment avenues and the attractive valuation of local equities.

Top picks of AKD Securities include: MEBL, MCB, HBL, OGDC, PPL, PSO, ENGROH, LUCK, DGKC, FCCL, ILP, and INDU.

Damages caused by Iranian attack to strategic installations forced Israel to ceasefire

The ceasefire Israel reluctantly embraced did not emerge from any humanitarian awakening. It was triggered by the sobering reality that Iranian ballistic missiles had successfully targeted some of Israel’s most sensitive strategic installations. A fresh State Comptroller report details how institutional negligence allowed these vulnerabilities to fester until they exploded into national exposure.

During the June conflict, Iran managed to breach Israel’s sophisticated air-defense systems and strike core facilities: Beersheba’s medical center, the Bazan oil refinery in Haifa, and crucial laboratories at the Weizmann Institute. These were not incidental targets—they were pillars of Israel’s medical, energy, and scientific infrastructure. Their exposure underscored a deeper structural failure.

Comptroller Matanyahu Englman’s report shows that warnings about these vulnerabilities date back to 2011. A detailed assessment issued in 2020 was also ignored. Despite years of alerts, the Defense Ministry, IDF, National Security Council, and Finance Ministry never created a coherent legal or operational framework to physically protect these sites. Instead, bureaucratic turf wars and funding disputes ensured that little to nothing was done.

Englman stressed a fundamental distinction: Israel’s air-defense umbrella—Iron Dome, David’s Sling, Arrow—may intercept threats, but no system is airtight. Once a missile breaks through, physical defenses must protect critical installations. Yet these were virtually nonexistent. Hamas, Hezbollah, the Houthis, and Iran all managed to exploit this weakness during the war.

Even after large-scale attacks began, the Defense Ministry continued to delay decisions. Committees met without purpose, deadlines were missed, and responsibility was shuffled between agencies. It was only in late 2024—when senior officials were preparing to depart—that any meaningful action started.

Once Iranian missiles struck strategic sites, Israeli leaders recognized that further escalation risked even more damaging hits. The country could not afford to expose additional “underdeclared” facilities, nor could its leadership sustain the political and economic fallout of deeper infrastructure disruption.

Israel did not choose ceasefire out of compassion for Gaza. It chose it because Iranian pressure exposed vulnerabilities its leadership could no longer hide.

When Arms Thrive - Humanity Pays Price

As missiles streak across skies from Gaza to Ukraine, another explosion is happening far from the battlefield — an explosion of profits. The global arms industry has just booked its highest revenue ever recorded, turning geopolitical turmoil into an unprecedented financial windfall.

According to the latest Stockholm International Peace Research Institute (SIPRI) report, the world’s top 100 arms manufacturers earned a staggering US$679 billion in 2024 — the highest figure in more than 35 years of monitoring. The trend is unmistakable - the more insecure the world becomes, the richer the military-industrial complex grows.

SIPRI notes that rising geopolitical tensions, nuclear weapons modernization, and sustained conflicts drove the bulk of the increase. A remarkable 77 of the Top 100 companies boosted their revenues, and 42 recorded double-digit growth.

For the first time since 2018, all five of the largest defence companies — Lockheed Martin, RTX, Northrop Grumman, BAE Systems and General Dynamics — expanded their earnings simultaneously, raking in a combined US$215 billion. Four of these giants are American; the fifth is British.

Europe and North America led the surge, but increases were registered across almost all regions — except Asia and Oceania, where Chinese industry struggles dragged totals down.

One of the most troubling profit spikes came from the Gaza war. Israel’s leading arms producers — Elbit Systems, Israel Aerospace Industries, and Rafael Advanced Defense Systems — collectively increased revenues by 16% to US$16.2 billion, as the assault on the enclave killed tens of thousands of Palestinians and flattened civilian infrastructure. The numbers expose a stark reality - war zones are becoming revenue streams.

In the United States — responsible for nearly half of all global arms revenue — a new entrant emerged. SpaceX, owned by billionaire Elon Musk, entered the Top 100 for the first time, more than doubling its arms revenue to US$1.8 billion. Musk’s deep alignment with US political power, including major donations to Donald Trump and Republican candidates, underscores how closely defence profits now intertwine with political influence.

The SIPRI figures raise a sobering question, when conflict becomes profitable, who is truly invested in peace?