At PSX volatility spikes daily trading 25.7%WoW

Pakistan Stock Exchange (PSX) remained volatile during the outgoing week driven by uncertainties surrounding the US-Iran conflict, pushing oil prices to US$80/ bbl before retreating. The benchmark index declined 4,626 points decline on Wednesday, but recovered partially on Friday. The index closed the week at 182,242 points, down 3,130 points or 1.7%WoW. Market activity remained strong, with average daily trading volume up 25.7%WoW to 1.3 billion shares.

On the macroeconomic front, worker remittances for June 2026 increased by 2%YoY to US$3.5 billion, taking FY26 total to a record high of US$41.6 billion, up 9%YoY.

Foreign exchange reserves held by State Bank of Pakistan (SBP) were reported at US$18.5 billion, as of July 03, 2026.

Yields during first FY27 T-Bills auction fell by 31-40 bps across all tenors.

Cement sales rose 18%YoY in June 2026 to 4.3 million tons, led by domestic dispatches, taking full year FY26 sales to 50.5 million tons, a 4-year high.

Other major news inflow during the week included: 1) Saudi makes biggest oil price cut in decades, 2) GoP buys more LNG as flows through Hormuz fail to recover, 3) IMF forecasts 3.5% growth rate for Pakistan’s economy in FY27, 4) RDA inflows increased to US$2.8 billion in FY26, and 5) Removal of MDR to provide leverage to banks.

Top performing sectors were: Synthetic & Rayon, Refinery, and Leasing Companies, while lagged included: Sugar & Allied Industries, Close-End Mutual Funds, and Transport.

Major buying was recorded by Individuals and Banks aggregated US$24.5 million. Major sellers were Companies and Mutual Funds with flows of US$20.9 million and US$11.3 million, respectively.

Top performing scrips were: IBFL, GHNI, CNERGY, PGLC, and LOTCHEM, while laggards included: MEHT, NPL, TPLRF1, KTML, and SNGP.

According to AKD Securities, going forward, positive progress on US-Iran conflict, along with moderating international oil prices towards pre-conflict levels would remain the key focus.

Additionally, favorable financial results for the period ended June 30, 2026 would support market sentiment in the near term. Market continues to trade at attractive valuations.

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

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

Trump and Netanyahu Have Made Iran a Regional Superpower

The greatest irony of the US-Israel military campaign against Iran is that it appears to have produced results opposite to those publicly declared by Washington and Tel Aviv. While Iran has undoubtedly suffered significant human, economic and infrastructure losses, the conflict has also demonstrated an uncomfortable reality - overwhelming military superiority does not always translate into strategic success.

The campaign, which began on February 28, 2026, was widely seen as an effort to weaken Iran's military capabilities, curtail its regional influence and force political concessions. Yet Iran has neither capitulated nor abandoned its strategic objectives. Instead, it has displayed remarkable resilience despite living under US sanctions for nearly half a century. History shows that nations subjected to prolonged external pressure often emerge more self-reliant, strategically patient and politically determined.

Perhaps the most significant consequence of the conflict has been the transformation of regional perceptions. Iran is increasingly viewed not merely as a country capable of surviving sustained military pressure, but as a state able to impose meaningful costs on two of the world's most powerful military forces. Whether one agrees with Tehran's policies or not, that perception alone strengthens its deterrence and elevates its regional standing.

The conflict has also prompted difficult questions about the United States' role in the Middle East. For decades, several regional governments relied on Washington as the ultimate guarantor of their security. Today, many are reassessing the costs and risks of that dependence. If confrontation with Iran places neighbouring states directly in harm's way, outsourcing national security no longer appears as reassuring as it once did.

Arab capitals also face an unavoidable geographical reality. Iran may lack the capability to strike the US mainland directly, but it possesses the means to target American military installations and strategic assets across the Gulf. Even without launching such attacks, the possibility alone has heightened concerns among governments hosting US forces and critical energy infrastructure.

Adding another layer of complexity are reports that Israel has offered to accommodate additional US military deployments on its territory. Whether viewed as strategic cooperation or military consolidation, such developments reinforce the perception that the regional security architecture is becoming increasingly polarized. Some Arab policymakers may also fear that refusing to align with initiatives such as the Abraham Accords could expose them to greater political and military pressure.

The broader geopolitical implications may prove even more consequential. If the United States gradually reduces its military footprint in the Arabian Peninsula, the resulting strategic vacuum is unlikely to remain unfilled. China and Russia have steadily expanded their diplomatic, economic and security engagement across the region and would be well positioned to deepen their influence as regional states diversify their strategic partnerships.

Ironically, a campaign intended to isolate and weaken Iran may instead be remembered for strengthening its regional position. Military conflicts often reshape perceptions more profoundly than they alter borders. In that respect, history may ultimately record that Trump and Netanyahu achieved the opposite of their declared objectives by helping transform Iran into a more influential and formidable regional power.

PSX benchmark index up 3.2%WoW

Pakistan Stock Exchange (PSX) witnessed positive momentum during the week ended on July 03, 2026. The improved outlook led to a strong rally in Banks. During the week the benchmark index gained 5,801 points and closed the week at 185,372 points, up 3.2%WoW. Despite a positive week, market participation measured by average daily traded volume declined by 32.5%WoW to 1.0 billion shares.

Market witnessed positive momentum, driven by lower-than expected inflation of 11.07%YoY in June 2026, as full year CPI remained in single digits at 7.05%YoY in FY26. This fueled sentiment around a potential policy rate cut later in the year as expectations for FY27 inflation remain subdued.

The aforementioned inflation also led to a decline in yields for 2, 3, 5, and 10-year tenors in Thursday’s PIB auction.

Positive talks in Doha between the US and Iran led to improved traffic in the Strait of Hormuz, though still below pre-war levels, bringing Brent near US$70/ bbl, further supporting investor confidence.

On the macroeconomic front, trade deficit rose to US$39.5 billion for FY26, up 22%YoY, as higher oil prices weighed on imports.

Foreign exchange reserves held by Pakistan at close of the fiscal year were reported at US$18.4 billion, marking a record high year-end level.

OMC sales declined marginally by 1%YoY in FY26 to 16,190,000 tons, led by higher oil prices.

Other major news flow during the week included: 1) Pakistan debt upgraded to ‘overweight’ by Barclays, 2) FBR achieved the revised tax collection target of PKR12,957 billion for FY26, 3) Middle East producers push on with oil/ LNG loadings despite ship attacks, 4) Pakistan eyes formal energy trade with Tehran, and 5) Pakistan and US discussed maritime cooperation.

Top performing sectors were: Jute, Sugar & Allied Industries, and Synthetic & Rayon, while laggards included: Textile Spinning, Leather & Tanneries, and Exchange Traded Funds.

Major buying was recorded by Mutual Funds and Companies of US$23.5 million and US$6.6 million, respectively. Major sellers were Insurance US$20.9 million and Individuals US$4.8 million.

Top performing scrips were: IBFL, TPLRF1, PTC, UBL, and JVDC, while laggards included: KEL, SRVI, MEHT, PABC, and SNGP.

According to AKD Securities, progress on US-Iran deal, along with moderating International oil prices towards pre-conflict levels would remain the key focus.

Additionally, favorable financial results for the period ended June 30, 2026 would support market sentiment in the near term.

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

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

PSX shortened trading week closes almost flat

Pakistan stock Exchange (PSX) witnessed volatility during the shortened trading week, as the benchmark Index declined through the first two trading days before recovering in the final session to close at 179,571 points, up 0.4%WoW. Due to the rollover activity, market participation increased to average daily trading of 1.5 billion shares as compared to 1.4 billion shares in the prior week.

On the positive side was, the US and Iran formally agreed on a 60-day roadmap towards a final deal, sustaining the recent downward momentum in international oil prices, extending decline on expectations of smoother crude flows through the Strait of Hormuz.

Sentiments further improved by Iranian President's visit to Islamabad.

The National Assembly passed the PKR18.8 trillion FY27 budget, broadly favorable for key sectors including Cement, Steel, Refineries, Textiles, Pharma, and Technology, alongside reduction/ elimination of super tax for individuals and corporates.

Another positive was the reduction in petrol prices.

The T-Bill auction saw cut-off yields falling sharply across all tenors.

Broad money supply (M2) rose 9.2% FYTD to PKR44.2 trillion as of June 12, 2026 driven primarily by a 2.8%WoW increase in scheduled bank deposits.

Other major news flow during the week included: 1) Gulf oil tanker rates nearly doubled as Middle East producers accelerated crude exports, 2) Pakistan expected to save US$3.24 billion through conversion of the Jamshoro Power Plant, 3) Government and the oil industry reached an agreement on a stable petroleum pricing formula, and 4) GoP to handover PIA to new owners by the month-end.

The most active sectors were: Leather & Tanneries, Sugar & Allied Industries, and Textile Composite, while laggards included: Vanaspati & Allied Industries, Synthetic & Rayon, and Refinery.

Major buying was recorded by Companies of US$209.3 million, while major net selling was recorded by Foreigners of US$159.4 million.

Top performing scrips were:  KEL, SRVI, MLCF, ILP, and SNGP, while laggards included: SSOM, AIRLINK, TPLRF1, BAFL, and ABL.

According to AKD Securities, progress on US-Iran deal, along with International oil prices would remain the key focus. Additionally, ease in inflation amid decreased oil prices and favorable financial results for June 2026 would support market sentiment in the near term.

Market continues to trade at attractive valuations.

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

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

Iran-US sign MOU: Pause in Conflict, Not End

With the signing of the memorandum of understanding (MOU), attention is shifting from military confrontation to political interpretation. As details emerge, supporters and critics in all three capitals—Washington, Tel Aviv, and Tehran—are attempting to define the agreement on their own terms. Such reactions are hardly surprising. In geopolitical disputes, agreements are often judged less by what they contain than by how they are perceived.

For the United States, the immediate achievement is the avoidance of a wider regional conflict. Washington can argue that a combination of military pressure and diplomacy brought Iran to the negotiating table without requiring a prolonged war. The agreement also helps contain risks to global energy supplies and international markets. However, the US administration may still face difficult questions. If Iran retains substantial strategic capabilities, critics may argue that the objectives initially articulated by Washington have only been partially achieved.

Israel can claim that its security concerns have been elevated to the center of international diplomacy. Any restrictions on Iran's military or nuclear-related activities would be viewed as a tangible gain. Yet Israeli policymakers are likely to remain cautious. Their primary concern has never been the signing of an agreement but the effectiveness of its enforcement. For Israel, verification may prove more important than the commitments themselves.

Iran, meanwhile, appears to have secured what it has long sought: relief from mounting economic and military pressure while preserving national sovereignty. Reduced sanctions pressure and improved economic prospects could provide much-needed support to the Iranian economy. At the same time, Tehran must convince domestic audiences that any commitments undertaken do not compromise its strategic independence or regional standing.

The agreement therefore creates opportunities as well as dilemmas for all three stakeholders. The United States seeks stability without appearing weak. Israel seeks security without relying solely on diplomacy. Iran seeks economic relief without sacrificing strategic autonomy.

Ultimately, the significance of the MOU will not be determined by its wording but by its durability. If implemented in good faith, it could reduce tensions in one of the world's most volatile regions. If mistrust and competing interpretations prevail, the agreement may be remembered not as a settlement, but as a temporary pause between successive crises.

Targets by Choice: They Can’t Have It Both Ways

The escalating confrontation between the United States fully supported Israel against Iran has exposed a fundamental contradiction in the posture of Arab Gulf states. Governments hosting US military bases have condemned Iranian strikes on these installations as violations of sovereignty. Yet this claim collapses under the weight of their own strategic choices.

US bases in the Gulf are not passive or symbolic presences. They are active components of a broader military architecture directed against Iran. These facilities support operations ranging from intelligence gathering to force projection. In any conflict, such installations are not neutral—they are legitimate military targets.

Iran’s response must be understood within this context. Lacking the capacity to strike the US mainland, Tehran has chosen to target the physical infrastructure through which US power is exercised in the region. This includes bases located in Saudi Arabia, United Arab Emirates, and Qatar. These locations are not incidental; they are central to the operational reach of the United States in the Gulf.

The assertion that such strikes amount to attacks on Arab states themselves is misleading. These bases, while geographically situated within sovereign territory, function as extensions of US military capability. Targeting them is not an assault on the host nation in the conventional sense, but a calculated effort to degrade an adversary’s war-making capacity.

More importantly, the argument of violated sovereignty overlooks a prior reality: sovereignty was effectively diluted when these states permitted foreign military infrastructure on their soil. Hosting bases that are actively engaged in conflict is not a neutral act—it is a strategic alignment. That alignment carries consequences.

The current situation is therefore not an unexpected escalation, but a predictable outcome. By embedding themselves within the operational framework of US military strategy, these states have assumed the risks associated with it. Their territories have, in effect, become extensions of a conflict in which they claim no direct role.

Protesting Iranian retaliation while continuing to host these bases reflects a fundamental inconsistency. It suggests an attempt to benefit from security arrangements without accepting the vulnerabilities they create. In geopolitical terms, this is not a sustainable position.

If these states seek genuine insulation from regional conflict, the solution is neither diplomatic protest nor rhetorical positioning. It is structural. Removing foreign military bases would reduce their exposure and reassert control over their own security environment. Anything less leaves them entangled in a conflict they cannot fully control, yet cannot credibly distance themselves from.

The reality is stark. By hosting US military infrastructure, these states have made themselves part of the battlefield. What they face today is not an unjust imposition, but the direct consequence of deliberate policy choices.

Muslim World at a Crossroads: OIC Must Act Before Iran Becomes the Next Battlefield

President Donald Trump’s increasingly belligerent rhetoric toward Iran should ring alarm bells across the Muslim world. Since Washington tightened its grip on Venezuela—effectively neutralizing its oil exports and political sovereignty—the White House’s tone on Tehran has grown markedly harsher. Today, threats of regime change, military strikes, and even targeted assassinations of Iran’s top clergy are being voiced with unsettling openness.

This trajectory is neither accidental nor unprecedented.

Recent Israeli and US operations against Iran succeeded largely because of access to regional airspace and ground facilities provided by neighboring Muslim countries. That cooperation—whether voluntary or extracted under pressure—proved decisive. There is little reason to believe the next phase, should it materialize, would be any different. On the contrary, Washington is almost certainly weighing which regional capitals might again be persuaded, coerced, or compelled to facilitate action against Tehran.

Herein lies the collective failure of Muslim leadership.

Individually, many states lack the political or economic resilience to withstand sustained US pressure. Collectively they possess enormous diplomatic weight, energy leverage, and strategic relevance. Yet this collective strength remains largely untapped, diluted by divisions and bilateral calculations.

This is precisely why the Organization of Islamic Cooperation (OIC) must immediately convene an emergency summit.

Such a meeting should not be symbolic. It must produce a clear, unified resolution rejecting any military action against Iran and warning against the use of Muslim territories, airspace, or infrastructure for attacks on a fellow Muslim nation. Silence or ambiguity will be interpreted as consent.

Muslim rulers must also confront a sobering reality: Iran is not the endgame. Washington’s broader strategy has long revolved around reshaping political landscapes in energy-rich Muslim countries, often replacing sovereign governments with compliant “puppet” regimes. Iraq, Libya, and Afghanistan offer painful reminders of how external intervention leaves behind fractured societies and enduring instability.

The argument here is not about endorsing Iran’s policies. It is about safeguarding regional sovereignty and preventing yet another war that would devastate Muslim populations while serving external geopolitical interests.

History will judge today’s leaders by whether they chose unity over expediency.

If the Muslim world fails to draw a firm collective line now, it risks becoming a revolving battlefield—one country at a time. An emergency OIC meeting is not merely desirable; it is an urgent strategic necessity.

US lawmakers question Trump's Iran talks

According to The Hill, President Trump is set to open direct talks with Iran this weekend in a high-stakes push for Tehran to give up its nuclear weapons ambitions, raising a chorus of questions and concerns from lawmakers in both parties. 

Iran on Monday said the “high-level talks,” set to start in Oman on Saturday, would be indirect, seeming to contradict Trump, who said earlier Monday, “We’re having direct talks with Iran.”

It’s also unclear if the president is looking to limit Iran’s nuclear capabilities — similar to the Obama-era agreement he trashed in 2018 — or demand the full destruction of its facilities.

Rep. August Pfluger, chair of the influential Republican Study Committee, said anything short of a nuclear disbandment was unacceptable. 

“A full commitment that they, not just when Trump is president, but whoever follows President Trump is there, that there is a firm commitment, and we know, we can verify, and there’s a complete dismantlement of their nuclear enterprises,” he told The Hill.

The uncertainty over Trump’s endgame has strained relations with Israel, which is wary of any US engagement with Iran, a sentiment shared by many on Capitol Hill. 

“I worry a little bit that this seems to be done, almost going around Israel,” said Sen. Mark Warner , the ranking member of the Senate Select Committee on Intelligence.

“I just worry that with the complete disruption of most of our alliances, I think our negotiating position is weakened,” he added.

Israeli Prime Minister Benjamin Netanyahu called for the full dismantling of Iran’s nuclear program while sitting next to Trump in the Oval Office on Monday, saying he wants to see the “Libya model” applied to Israel’s top adversary.  

Trump has warned, “Iran is going to be in great danger” if the talks fail. And Netanyahu has long been mulling an assault on Iran’s nuclear facilities — though such a major move would be unlikely without some level of US backing.

The fact the talks are happening at all signals that pragmatic voices in Trump’s ear are winning out over Iran hawks, at least for the moment.