PSX benchmark index posts 6.08%WoW decline

Pakistan Stock Exchange (PSX) trended negative throughout the week, some recovery was observed during the final trading session. The benchmark index declined by 6,939 points or 6.08%WoW to close at 107,175 level on Friday, May 09 2025.

Notably, Thursday saw the largest single-day decline in the index's history, when the index plunged by 6,482 points or 5.89% amid heightened concerns over regional instability between the two neighboring countries.

On Friday the index recovered 3,648 points or 3.52% on the expectation of the approval of a US$1.0 billion tranche under the first review of the EFF program by the IMF’s Executive Board.

On the macro front, the central bank reduced policy rate by 100 bps to 11%. Workers’ remittances continued their strong trend, rising to US$3.2 billion for April 2025, up 13%YoY).

The budget deficit for 9MFY25 was recorded at PKR3.0 trillion, with the primary balance posting a surplus of PKR3.5 trillion for the same period.

IMF's Executive Board has approved the US$1.0 billion tranche under the first review of the EFF program, alongside approving the new RSF program of US$1.3 billion.

Average daily traded volume was recorded at 508 million shares as compared to 424 million shares a week ago, up 20%WoW).

Foreign exchange reserves held by State Bank of Pakistan (SBP) reserves rose by US$118 million to US$10.3 billion as of May 02, 2025.

Other major news flow during the week included: 1) India cut water supply to Pakistan from Baglihar Dam on Chenab River, 2) Cement sales for April 2025 were recorded at 3.34 million tons, up 8%YoY, 3) S&P Global forecasted more rate cuts in Pakistan, 4) OMC sales in April 2025 increased by 32%YoY, and 5) GoP raised PKR299 billion through PIB auction.

Vanaspati & Allied Industries, Sugar, and Synthetic & Rayon were amongst the top performing sectors, while Transport, Chemical, and Refinery were the laggards.

Major selling was recorded by Mutual Funds and Individuals with a net sell of US$34.9 million. Banks, Companies and other organizations absorbed most of the selling with a net buy of US$31.0 million.

Top performing scrips of the week were: NESTLE, JDWS, IBFL, and MUREB, while laggards included: AGL, SEARL, PTC, and PSX.

According to AKD Securities, market appears to have overreacted to the ongoing escalations, as the development of nuclear capability has significantly reduced the likelihood of full-scale war. The same has been witnessed during escalations since both nations attained nuclear deterrence. During past escalation periods post-nuclear capability, the market has posted an average return of positive 3%. Meanwhile, in 3 months following de-escalation, the market has historically delivered an average return of +5%.

The brokerage house expects the market to rebound with de-escalation of ongoing geopolitical tensions, alongside approval of a US$1.0bn tranche under IMF’s EFF program and US$1.3 billion under new arrangement of RSF.

The brokerage house maintains an ‘Overweight’ stance on Banks, E&Ps, Fertilizer, Cement, OMCs, Autos, Textile, and Technology sectors, as these stand to benefit from monetary easing, structural reforms and reciprocal tariffs.

Pakistan: Time to Redefine Policy towards India

Indian Prime Minister shut all the doors for negotiation by once again reiterating “Kashmir is an integral part of India and no talks can be held on the issue”. He sounded a typical extremist Hindus who says, “We will not allow another division of India on the basis of religion”. His anti-Pakistan sentiments were at its peak when he said “Pakistan is the epicenter of cross border terrorism”. In fact his speech was aimed at declaring Pakistan a terrorist state.

In the simplest words he said ‘Pakistan is sponsoring terrorism”. This is a big slap on the face of all those Pakistanis who have been signing mantra of ‘Aman Ki Asha’ for years and ignoring that India is being ruled by Hindu extremists, who are adamant at destroying Pakistan for achieving the status of regional super Power. Let this also be kept in mind that the United States is the biggest proponent of this philosophy.

India blames that Pakistan’s foreign policy is being dictated by hawks but worse is the situation in the country which claims to be a secular state and also the biggest democracy of the world. The Indian occupied Kashmir is under the siege of army/law enforcing agencies for decades and people are denied ‘right of self determination’ despite approval of resolution in the United Nations.

In this endeavor India is fully supported by the colonial rulers of yester years. They allowed creation of Bangladesh and division of Indonesia and Sudan on the basis of religion, sponsored change of regime in Iraq, Libya and are supporting rebels in Syria for last two years.

However, they are never tired of appeasing India, only because it is their major trading partner. They are supporting India because it is trying to demolish a country created on the basis of an ideology. There are only two states in the world, Pakistan and Israel that were created on the basis of ideology.

It has been highlighted time and again that Pakistan suffers from internal and external threats. While frontiers can be guarded the embedded enemies are difficult to catch. These perpetrators wear various caps and the worst display of ‘cold blooded mercenaries’ was the attack on the helicopter of Pakistan Army that went to earthquake affected areas to deliver food etc.

TTP is yet another faction of the fascists who is at war with Pakistan Army for years. However, worst is the attitude of those who are still trying to appease the terrorists, telling the government to declare ceasefire unilaterally but not asking the perpetrators that lay down arms is a prerequisite to talk.  

It is also been mention repeatedly that a proxy war is going on in Pakistan. All those adamant at destroying Pakistan have joined hands. The perpetrators may wear different caps but have a common objective, destroy Pakistan.

It is highly regrettable that many Pakistanis, particularly politicians have not been able to distinguish between friends and foes. Especially in case of India all the efforts to restore ‘friendly relations’ have been frustrated by the hawks prevailing over in India. This hawkish attitude is at its maximum when general elections are to be held in India. Often political parties try to solicit vote on the basis of anti-Pakistan stance.