PSX benchmark index declines by 0.5%WoW

Pakistan Stock Exchange (PSX) remained range bound during the week, as uncertainty over the upcoming budget moderated investor confidence built on Pak-India ceasefire and the IMF agreement. The benchmark index declined by 546 points or 0.5%WoW to close at 119,103 points on Friday.

Market participation also weakened, with average daily traded volumes falling by 25%WoW to 492 million shares, down from 660 million shares a week ago.

As regards FY26 Federal budget, revenue target is expected to rise to PKR14.3 trillion from FY25 target of PKR12.3tn. A key highlight includes tariff rationalization; capping the highest tariff at 15%, removing Additional Customs Duty (ACD), and reducing Regulatory Duty by 80% till FY30.

The National Accounts Committee approved the provisional GDP growth at 2.68%YoY for FY25. Consequently, Pakistan's economy has expanded to US$411 billion, making it the 40th largest in the world and pushing per capita income to a record US$1,824.

In its post–first review report, IMF acknowledged that Pakistan has met all quantitative performance criteria, most indicative targets, and several structural benchmarks.

IMF also revised down GDP growth and current account deficit forecasts and updated the timelines of structural benchmarks along with introducing new ones for the coming year. Furthermore, IMF endorsed the GoP plan to eliminate the power sector's circular debt by FY31.

On the currency front, PKR depreciated by 0.11%WoW to close at PKR281.97/US$. Foreign exchange reserves held by State Bank of Pakistan (SBP) increased by US$1.0 billion to a 17-week high of US$11.4 billion.

Other major news flow during the week included: 1) IMF projects external debt to rise to US$126.7 billion by next financial year, 2) Profit repatriation jumps 115%YoY in last month, 3) During Q3FY25 Pakistan economy posts 2.4%YoY growth, and 4) Power generation surges 22%YoY in April 2025.

Woolen, Transport, and Inv Banks/ Cos & Securities Cos were amongst the top performers, while Sugar & Allied Industries, Cement, and Cable & Electrical Goods reported remained laggards.

Major selling was recorded by Mutual Funds, other organizations, and Companies with a net sell of US$10.1 million, US$4.1 million, and US$2.9 million respectively. Individuals and Insurance absorbed most of the selling with a net buy of US$13.1 million and US$7.5 million, respectively.

Top performing scrips of the week were: POML, RMPL, GADT, BNWM, and PKGP, while laggards included:  HUMNL, NATF, LUCK, AVN, and MARI.

According to AKD Securities, the market is expected to remain positive in the coming weeks, with developments around the upcoming federal budget likely to guide short-term sentiment. The KSE100 is anticipated to sustain its upward trajectory, 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.

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

 

Netanyahu accuses France, Britain and Canada of 'emboldening' Hamas

Israeli Prime Minister Benjamin Netanyahu accused the leaders of France, Britain and Canada of wanting to help the Palestinian militant group Hamas after they threatened to take "concrete action" if Israel did not stop its latest offensive in Gaza.

The criticism, echoing similar remarks from Foreign Minister Gideon Saar on Thursday, was part of a fightback by the Israeli government against the increasingly heavy international pressure on it over the war in Gaza.

"You're on the wrong side of humanity and you're on the wrong side of history," Netanyahu said.

The Israeli leader, facing an arrest warrant from the International Criminal Court over alleged war crimes in Gaza, has regularly criticized European countries as well as global institutions from the United Nations to the International Court of Justice over what he says is their bias against Israel.

But as the flow of images of destruction and hunger in Gaza has continued, fuelling protests in countries around the world, Israel has struggled to turn international opinion, which has increasingly shifted against it

"It's hard to convince at least some people, definitely on the far left in the US and in some countries in Europe, that what Israel is doing is a war of defence," said former Israeli diplomat Yaki Dayan.

"But this is how it is perceived in Israel and bridging this gap is sometimes an impossible mission," he said.

Israeli officials have been particularly concerned about growing calls for other countries in Europe to follow the example of Spain and Ireland in recognizing a Palestinian state as part of a two-state solution to resolve decades of conflict in the region.

Netanyahu argues that a Palestinian state would threaten Israel and he has framed the killing of two Israeli embassy staffers in Washington on Tuesday by a man who allegedly shouted "Free Palestine" as a clear example of that threat.

He said "exactly the same chant" was heard during the attack on Israel by Hamas on October 07, 2023.

"They don't want a Palestinian state. They want to destroy the Jewish state," he said in a statement on the social media platform X.

"I could never understand how this simple truth evades the leaders of France, Britain, Canada and others," he said, adding that any moves by Western countries to recognize a Palestinian state would "reward these murderers with the ultimate prize".

Instead of advancing peace, the three leaders were "emboldening Hamas to continue fighting forever", he said.

 

Israel might stage a new “Susannah” to implicate Iran

Iran’s Ambassador to Britain, Ali Mousavi, has sounded the alarm over potential "false flag operations" aimed at sabotaging Tehran-London relations. The rift widened after the Britain charged three Iranians under its National Security Act, alleging ties to a "foreign intelligence service".

Ambassador Mousavi’s alert reflects Tehran’s fear that Israel might stage a new "Susannah" to implicate Iran, leveraging the IRGC’s prominence and stalled nuclear talks. The Zionist regime’s history of sabotage makes such scenarios plausible.

Some experts contend that the British actions are rooted in mounting frustration over its declining influence in international diplomacy, prompting British officials to leverage pressure tactics to steer negotiations.

Additionally, other analysts argue that these measures dovetail with pro-Israel initiatives aimed at designating Iran’s Islamic Revolution Guard Corps (IRGC) as a terrorist organization—a classification Tehran vehemently condemns, viewing it as an unjustified escalation that severely damages diplomatic relations and heightens tensions between Iran and the West.

Iranian officials cite the Israeli regime’s track record of false flag operations to bolster their warnings. Foreign Ministry Spokesman Esmaeil Baqaei declared: "The Zionist regime has long flouted international law, from Gaza to the Lavon Affair, using sabotage to deceive."

The Lavon Affair

In July 1954, the Israeli regime launched Operation Susannah, later dubbed the Lavon Affair, a botched covert mission in Egypt.

Israeli military intelligence recruited a cell of Egyptian Jews to bomb civilian targets—cinemas, libraries, and U.S.-owned cultural centers in Cairo and Alexandria.

The plot aimed to pin the attacks on the Muslim Brotherhood or Egyptian communists, sowing chaos to convince Britain to keep troops in the Suez Canal zone, a linchpin for Tel Aviv’s regional strategy.

The operatives used crude incendiary devices hidden in books and bags, targeting places like the Cairo train station’s post office and the Rio Cinema.

Egyptian security foiled the scheme, capturing the agents after a bomb prematurely detonated. Public trials followed, with two executed and others imprisoned.

The fallout humiliated the Israeli regime: War Minister Pinhas Lavon resigned amid internal strife, and relations with the U.S. and UK soured.

Israel denied responsibility until 2005, when it honored surviving operatives, quietly admitting its role. 

USS Liberty Incident

On June 08, 1967, amid the Six-Day War, Israeli jets and torpedo boats assaulted the USS Liberty, a US Navy intelligence ship in international waters off Sinai. The two-hour barrage—machine-gun fire, napalm, and torpedoes—killed 34 American sailors and wounded 171, nearly sinking the vessel.

The regime insisted it mistook the Liberty, flying a US flag, for an Egyptian horse carrier, offering apologies and compensation.

Yet survivors and US officials, including Secretary of State Dean Rusk, disputed this, citing evidence of deliberate intent.

Declassified reports reveal Israeli reconnaissance planes circled the ship hours earlier, and radio intercepts suggest orders to ensure no survivors. Critics argue Tel Aviv aimed to silence US monitoring of its Golan Heights offensive.

Israeli Embassy Bombing in London

On July 26, 1994, a car bomb rocked Israel’s embassy in London, injuring 20. Hours later, a second blast hit Balfour House, a Jewish charity, wounding six. British authorities blamed Palestinian militants, convicting Samar Alami and Jawad Botmeh despite their claims of innocence.

Former MI5 officer Annie Machon later alleged Mossad staged the attacks to smear Palestinian activists in Britain, then an alleged hub for West Asian exiles.

Machon claimed the bombs’ sophistication pointed to state actors, not amateurs, and noted MI5’s ignored warnings of Israeli involvement, suggesting a false flag to sway British policy.

 

 

Iran warns Israel and US against any attack on its nuclear sites

The United States would bear legal responsibility in the event of an Israeli attack on Iranian nuclear facilities, Foreign Minister Abbas Araqchi said on Thursday, following a CNN report that Israel might be preparing strikes on Iran.

Iran and the US, Israel's closest ally, will hold a fifth round of nuclear talks on Friday in Rome amid deep disagreement over uranium enrichment in Iran, which Washington says could lead to developing nuclear bombs. Iran denies such intent.

“Iran strongly warns against any adventurism by the Zionist regime of Israel and will decisively respond to any threat or unlawful act by this regime,” Araqchi said in a letter addressed to United Nations Secretary-General Antonio Guterres.

Araqchi said Iran would view Washington as a “participant” in any such attack, and Tehran would have to adopt “special measures” to protect its nuclear sites and material if threats continued, and the International Atomic Energy Agency watchdog would be subsequently informed of such steps.

Although Araqchi did not specify what measures were being considered, an adviser to Iran's Supreme Leader said in April that Tehran could suspend cooperation with the IAEA or transfer enriched material to safe and undisclosed locations.

In a separate statement released on Thursday, Iran’s elite Revolutionary Guards warned Israel would receive a "devastating and decisive response" if it attacks Iran.

"They are trying to frighten us with war but are miscalculating as they are unaware of the powerful popular and military support the Islamic Republic can muster in war conditions," Guards spokesperson Alimohammad Naini said.

A collapse of US-Iran negotiations or a new nuclear deal that does not alleviate Israeli concerns about Iran developing nuclear weapons through enrichment could motivate Israeli strikes on its regional arch-foe, diplomats say.

Later on Thursday, Araqchi said in a televised interview that if the United States aims to end uranium enrichment then there will be no nuclear deal.

"They have said [U.S. officials]... that they do not believe in enrichment in Iran... and it has to stop completely, if this is their goal there will be no deal", Araqchi said in the interview carried by state TV.

The Iranian foreign minister said the idea of a uranium enrichment consortium with the participation of other nations is not bad, but will not replace enrichment on Iranian soil.

On Tuesday, Iranian Supreme Leader Ayatollah Ali Khamenei said US demands that Tehran stop refining uranium were "excessive and outrageous," and he voiced doubt over whether talks on a new nuclear deal would succeed. Tehran maintains its nuclear energy program is exclusively for civilian purposes.

 

Pentagon accepts Qatar jet for use by Trump

“The Secretary of Defense, Pete Hegseth has accepted a Boeing 747 from Qatar in accordance with all federal rules and regulations,” chief Pentagon spokesperson Sean Parnell said in a statement to The Hill’s sister network NewsNation.

“The Department of Defense will work to ensure proper security measures and functional-mission requirements are considered for an aircraft used to transport the President of the United States,” he added.

The Qatari gift was also raised at President Trump’s meeting with South Africa’s president at the White House on Wednesday. Trump shot down the question and pushed back on the reporter who asked about criticism around the jet.

Trump last week said he would accept the US$400 million luxury Boeing 747-8, previously used by the Qatari royal family, as a stand-in for the aging Air Force One fleet.

The plane — which is one of the largest foreign gifts ever accepted by a US president — has been criticized by US lawmakers on both sides of the aisle, who say it raises both ethical and security questions.

Numerous Republicans have argued that the purportedly free jet comes with strings, given it will need to go through the lengthy and expensive process of being transformed into Air Force One.

Others have raised safety concerns about the jet, including a group of senior Democratic senators led by Sen. Adam Schiff, who want the Pentagon’s watchdog to look into the Defense Department’s acceptance of the gifted plane and its role in the transfer. 

Trump has defended his decision to accept the jet, arguing it is legal and dismissing the bipartisan criticism as a “radical left story.”

Boeing has had a contract with the US government since Trump’s first term in 2018 to replace its pair of aging Air Force Ones, two military versions of the Boeing 747. The delivery of the aircraft has been delayed until at least 2027, a timeline Trump has latched onto in arguing the Qatari jet could serve as an interim plane.

But the gifted aircraft from Qatar would face a retrofit that could take years to complete and cost hundreds of millions of dollars, with new power systems, electrical wiring and other technology for secure communications and self-defense needed.

OPEC Plus pushing US shale producers out

OPEC Plus leaders Saudi Arabia and Russia seems to be working to take over US shale production to win back market share from the United States, reports Reuters.

OPEC's last price war on US producers 10 years ago ended in failure, as breakthroughs in technology and drilling allowed US shale companies to cut costs, compete at lower prices and in the following years take market share from the 12-member group.

US production is more vulnerable now to a price war. US shale producers have seen costs rise in the past three years. Their income is also falling due to declining global oil prices - linked in part due to the economic fallout from President Donald Trump's tariff policies.

Reuters spoke to 10 OPEC Plus delegates and industry sources briefed by Saudi Arabia or Russia on their production strategy.

Retaking some market share is one motivation for a May 03 decision to bring back output more rapidly than previously planned, according to four of the 10 sources, though none said the strategy constituted a price war yet.

To hurt shale producers today, OPEC Plus would need to push oil prices lower than their current levels of around US$65 per barrel to around US$55, said the sources, all of whom declined to be identified due to the sensitivity of the matter.

"The idea is to put a lot of uncertainty into plans by others with prices at below US$60 per barrel," said one industry source briefed on Saudi Arabia's thinking.

OPEC Plus, which includes OPEC members and fellow producers such as Russia and Kazakhstan, cited "the current healthy market fundamentals, as reflected in the low oil inventories" as its reasoning for the production decision.

OPEC Plus output hikes also come as the best quality shale areas in the biggest US oilfield, the Permian, have been depleted. As producers move toward secondary areas, production costs are rising. Inflation has added to those costs.

US oil production was already likely to fall this year, as top quality inventory has been drilled out, he said. And the US administration's tariff policies and the resulting volatile market have weighed heavily with bankruptcies expected across the industry, Guan added.

Earlier this month, the U.S. oil and gas rig count fell to its lowest since January, according to Baker Hughes.

Shale firm Diamondback Energy (FANG.O), opens new tab lowered its output forecast for 2025 earlier this month, saying that global economic uncertainty and rising OPEC+ supply have brought U.S. oil production to a tipping point.

 

Israel getting ready to attack Iranian nuclear facilities

The United States has obtained new intelligence suggesting that Israel is making preparations to strike Iranian nuclear facilities, even as the Trump administration has been pursuing a diplomatic deal with Tehran, reports CNN.

Such a strike would be a brazen break with President Donald Trump. It could also risk tipping off a broader regional conflict in the Middle East — something the US has sought to avoid since the war in Gaza started in October 2023.

Officials caution it’s not clear that Israeli leaders have made a final decision, and that in fact, there is deep disagreement within the US government about the likelihood that Israel will ultimately act. Whether and how Israel strikes will likely depend on what it thinks of the US negotiations with Tehran over its nuclear program.

The chance of an Israeli strike on an Iranian nuclear facility has gone up significantly in recent months. The prospect of a Trump-negotiated US-Iran deal that doesn’t remove all of Iran’s uranium makes the chance of a strike more likely.

The heightened worries stem not only from public and private messaging from senior Israeli officials that it is considering such a move, but also from intercepted Israeli communications and observations of Israeli military movements that could suggest an imminent strike.

Among the military preparations the US has observed are the movement of air munitions and the completion of an air exercise.

Those same indicators could also simply be Israel trying to pressure Iran to abandon key tenets of its nuclear program by signaling the consequences if it doesn’t — underscoring the ever-shifting complexities the White House is navigating.

Trump has publicly threatened military action against Iran if his administration’s efforts to negotiate a new nuclear deal to limit or eliminate Tehran’s nuclear program fail. Trump also set a limit on how long the US would engage in diplomatic efforts.

In a letter to Iran’s Supreme Leader Ayatollah Ali Khamenei in mid-March, Trump set a 60-day deadline for those efforts to succeed. It has now been more than 60 days since that letter was delivered, and 38 days since the first round of talks began.

A senior Western diplomat who met with the president earlier this month said that Trump communicated the US would give those negotiations only weeks to succeed before resorting to military strikes.

That has put Israel “between a rock and a hard place,” said Jonathan Panikoff, a former senior intelligence official specializing in the region.

Prime Minister Benjamin Netanyahu is under pressure both to avoid a US-Iran deal that Israel doesn’t view as satisfactory, while also not alienating Trump — who has already broken with the Israeli prime minister on key security issues in the region.

“At the end of the day, the Israeli decision-making is going to be predicated on US policy determinations and actions, and what agreements President Trump does or does not come to with Iran,” Panikoff said, who added that he did not believe Netanyahu would be willing to risk entirely fracturing the US relationship by launching a strike without at least tacit US approval.

Iran is in its weakest military position in decades, after Israel bombed its missile production facilities and air defenses in October last year, combined with an economy weakened by sanctions and Israel’s decimation of its most powerful regional proxies. Israel.

The US is stepping up intelligence collection to be prepared to assist if Israeli leaders decide to strike, one senior US official told CNN.

A source familiar with the Trump administration’s thinking told CNN the US is unlikely to help Israel carry out strikes on Iranian nuclear sites at this moment.

Israel does not have the capacity to destroy Iran’s nuclear program without American assistance, including midair refueling and the bombs required to penetrate the facilities deep underground, a need that is also reflected in previous US intelligence reports.

An Israeli source told CNN that Israel would be prepared to carry out military action on its own if the US were to negotiate what this source described as a “bad deal” with Iran that Israel cannot accept.

It is more likely they strike to try and get the deal to fall apart if they think Trump is going to settle for a ‘bad deal’. The Israelis have not been shy about signaling both publicly and privately.

A US intelligence assessment from February suggested Israel could use either military aircraft or long-range missiles to capitalize on Iran’s degraded air defense capabilities, CNN previously reported.

The same assessment also described how such strikes would only minimally set the Iranian nuclear program back and wouldn’t be a cure-all. “It’s a real challenge for Netanyahu,” Panikoff said.

The US talks with Iran are stuck on a demand that Tehran not enrich uranium, a process which can enable weaponization, but which is also necessary to produce nuclear power for civilian purposes.

Special envoy Steve Witkoff, who is leading the US delegation, told ABC News over the weekend that Washington “cannot allow even 1% of an enrichment capability” under an agreement. “We’ve delivered a proposal to the Iranians that we think addresses some of this without disrespecting them,” he said.

Khamenei said on Tuesday that he does not expect negotiations with the United States over Tehran’s nuclear program to “reach a conclusion,” calling the US demand that Iran not enrich uranium a “big mistake.”

Iran insists it has a right to enrich under the United Nations’ Treaty on Nuclear Non-Proliferation and says it will not relinquish that right under any circumstances.

Another round of talks may take place in Europe this week, according to Witkoff. Both the US and Iran have put proposals on the table, but after more than a month of the talks facilitated by Oman, there is no current US proposal with Trump’s sign-off, sources said.

US intelligence agencies in February issued warnings that Israel will likely attempt to strike facilities key to Iran’s nuclear program this year, CNN previously reported.

It has “consistently been the Israeli position that the military option is the only option to stopping Iran’s military nuclear program,” one US official noted.