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.

 

PSX benchmark index closes flat despite volatility

Pakistan Stock Exchange (PSX) remained volatile during this past week. The benchmark index closed at 154,440 points on Friday, September 12, 2025, up 162 points or 0.11%WoW. Market participation remained strong with average daily traded volume increasing by 2.2%WoW to 1,092 million shares, from 1,068 million shares a week ago.

The week opened on a strong note supported by sustained momentum from better than expected corporate results and Chinese President’s commitment to accelerate CPEC 2.0 implementation. However, momentum eased later in the week as investors’ sentiment turned cautious ahead of the Monetary Policy Committee (MPC) meeting scheduled for September 15, 2025 amid ongoing floods.

In the latest PIB auction, yields declined by 11bps and 7bps to 12.04% and 12.38% for the 10, and 15 year tenors, while the 2-year paper yield rose by 11bps to 11.20%.

Workers’ remittances for August 2025 were reported at US$3.1 billion, up 7%YoY.

Auto sector witnessed a surge in volumes in August 2025 to 15,712 units, up 35%YoY, largely attributed to 62%YoY increase in lower segment passenger cars sales.

Foreign exchange reserves held by the State Bank of Pakistan (SBP) increased by US$34 million to US$14.3 billion as of September 05, 2025. PKR appreciated by 0.04%YoY to close at PkR281.55/US$.

Other major news flow during the week included: 1) ADB and AIIB agreed to provide guarantees to help Pakistan issue US$250 million Panda bonds, 2) FBR unveiled plan to lift tax to GDP ratio to 18%, 3) Exports to US declined 13%YoY in August 2025, 4) Pakistan and China sealed US$601 million agriculture JVs, and 5) Government expressed intentions to abolish cross subsidies and peak rates in industrial power tariffs.

Leasing Companies, Tobacco, and Engineering were amongst the top performing sectors, while Jute, Property, and Vanaspati & Allied industries remained laggards.

Major selling was recorded by foreigners and other organizations with a net sell of US$12.1 million and US$3.7mn, respectively. Major buying was recorded by Companies with a net buy of US$11.9 million.

Top performing scrips of the week were: LOTCHEM, PAKT, MUGHAL, AVN, and LCI, while laggards included: BOP, NATF, JVDC, AGL, and AICL.

According to AKD Securities, PSX is expected to remain positive in the coming weeks, with the upcoming IMF review and any developments over circular debt.

The benchmark index is anticipated to sustain its upward trajectory, with a target of 165,215 points by end December 2025. The market is primarily driven by strong earnings in Fertilizers, sustained ROEs in Banks, and improving cash flows of E&Ps and OMCs, benefiting from falling interest rates and economic stability.

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