PSX benchmark index up 3.0%WoW

The Pakistan Stock Exchange moved upwards sharply during the week, with the benchmark index advancing 5,375 points, up 3.0%WoW to close at 184,410 points. Market participation also strengthened by 25%WoW, with average daily trading volume rising to 1.6 billion shares, as compared to 1.3 billion shares in the prior week.

Momentum was driven by positive sentiments due to favorable macroeconomic indicators alongside improved relations and news of potential military equipment deals with multiple countries including Saudi Arabia, Bangladesh and Azerbaijan.

Moreover, positive meetings with China to strengthen coordination at bilateral and multilateral forums and towards CPEC phase II further helped improve the sentiment.

Remittances for December 2025 rose to US$3.6 billion, up 17%YoY, totaling to US$19.7 billion for 1HFY26, up 11%YoY).

The Central government debt fell by PKR345 billion in 5MFY26 to PKR77.5 trillion. T-bill yields declined on all the tenors, on first auction following declining inflation.

Cement offtakes grew by 1.5%YoY during December 2025, due to higher local dispatches.

Foreign exchange reserves held by State Bank of Pakistan (SBP) increased by US$141 million to US$16.1 billion as of January 02, 2025.

Other major news flow during the week included: 1) Gas circular debt swells to PKR3.2 trillion, 2) Govt mulls PKR5/ ltr levy on MS and Diesel to aid gas sector, 3) OGRA moves to scrap fixed returns in gas pricing, and 4) Pakistan cuts national average power tariff for CY26.

Sector-wise, Transport, Pharmaceuticals, Insurance, Refinery, Leather & Tanneries were amongst the top performers, while Textile Spinning, Vanaspati & Allied Industries, Jute, Miscellaneous, and Close-End Mutual Funds were amongst the laggards.

Major buying was recorded by Mutual Funds and Companies with a net buy of US$71.5 million and US$35.5 million. Banks and Foreigners were major sellers with net sell of US$56.3 million and US$42.5 million, respectively.

Top performing scrips of the week were: AICL, MCB, ABOT, HALEON, and SAZEW, while laggards included PSEL, SSOM, GHGL, DHPL, and ISL.

The brokerage house foresees the positive momentum in the benchmark index to continue due to further monetary easing driven by improving external account position and continuous focus on reforms amid political stability.

The brokerage house forecasts the benchmark Index to reach 263,800 by December 2026.

Investors’ sentiments are expected to improve on the likelihood of foreign portfolio and direct investment flows, driven by improved relations with the United States and Saudi Arabia.

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