PSX benchmark index up 4.1%WoW

Pakistan Stock Exchange (PSX) sustained its bullish momentum during this past week, driven by investors’ confidence following the historic meeting between the Prime Minister and US President at the Oval Office. The benchmark index was up 6,733 points or 4.1%WoW to close at a historic high of 168,990 points on Friday October 03, 2025. However, market participation plunged by 19.8%WoW to an average daily traded volume to 1.8 billion shares, as compared to 2.2 billion shares traded a week ago.

On the macroeconomic front, inflation for September 2025 was recorded at 5.6%YoY, marking the highest level in the past 10 months, given the recent flooding. In anticipation, yields on tenors of T-Bills in the last auction increased, reflecting investor expectations that the policy rate will remain unchanged in the near term.

Trade deficit for September 2025 increased to US$3.3 billion, from a deficit of US$2.3 billion during the same period last year.

Cement sector, offtakes for September 2025 was recorded at 4.25 million tons, up 7% YoY, given 14%YoY surge in domestic sales.

Offtakes of OMCs during September 2025 was registered at 1.4 million tons, up by 8%YoY.

Other major news flow during the week included: 1) Prime Minister solicited US investment in meeting with President Trump, 2) Trade with Central Asia, Kabul surges to US$2.4 billion, 3) Petroleum Division to discuss GST waiver for petroleum products with IMF, 4) Pakistan-IMF talks on US$ 7billion EFF and RSF reviews begins, and 5) FBR notifies 40% regulatory duty on import of used cars.

Commercial Banks, Fertilizer, Refinery, Vanaspati & Allied Industries and Transport were amongst the top performers, while Modarabas, Jute, Textile Spinning, Close-end Mutual Funds and Textile Composite were amongst the laggards.

Major buying was recorded by Mutual Funds and Individuals with a net buy of US$82.2 million, while Insurance, Companies and Banks/DFIs remained the highest seller, with a net sell of US$71.4 million.

Top performing scrips of the week were: BOP, SAZEW, FABL, YOUW and FATIMA, while laggards included: HUMNL, NPL, RMPL, MTL, and PIOC.

AKD Securities foresees the momentum in the benchmark index to continue given smooth completion of IMF 2nd 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 US and Saudi Arabia.

The outlook is supported by the lack of alternative investment avenues and the attractive valuation of local equities.

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

 

 

Triple Whammy of Crude Uncertainty

Oil prices rose slightly on Friday after four straight sessions of declines but were on track for their steepest weekly decline since late June due to market expectations that the OPEC Plus could hike output further despite oversupply concerns. If prices do not further recover in this session, Brent could close at the lowest level since the week ended May 30, while WTI would finish at a level not seen since May 02. On a weekly basis, Brent has plunged 8.3%, while WTI is 7.6% lower.

Oil markets thrive on stability, yet today they stand at the crossroads of three unpredictable forces: OPEC’s internal calculations, China’s demand swings, and the broader geopolitical turmoil stretching from the Middle East to Eastern Europe. Together, these factors create a triple whammy of uncertainty that is shaking investor confidence and distorting price forecasts.

First, OPEC remains the central player, but its cohesion is under strain. Saudi Arabia’s output discipline often clashes with the fiscal needs of smaller producers desperate for higher revenues. The cartel’s recent production adjustments reflect less a unified strategy and more a fragile balancing act between market control and survival. Traders now treat OPEC announcements with skepticism, wary that compliance may fracture under pressure.

Second, China—the world’s largest crude importer—casts a long shadow. Its slowing economy, punctuated by property sector woes and uneven industrial growth, has dampened energy consumption. Yet at the same time, Beijing stockpiles aggressively when prices dip, injecting volatility into the market. A single policy shift in China, from stimulus measures to green energy acceleration, can ripple through global demand curves in weeks, leaving analysts scrambling to adjust projections.

Finally, geopolitics adds combustible uncertainty. Wars in Ukraine and the Middle East, sanctions on Russia and Iran, and maritime tensions in the South China Sea all threaten supply chains and shipping lanes. Insurance premiums on crude shipments rise, pipelines face sabotage risks, and diplomatic fractures widen the unpredictability. Energy markets are not just reacting to supply and demand—they are hostage to political brinkmanship.

What makes this triad dangerous is their intersection. OPEC’s decisions are influenced by geopolitical rivalries; China’s demand patterns intersect with U.S. foreign policy and sanctions regimes. The market is no longer shaped by economics alone—it is choreographed by power struggles, both overt and hidden.

For investors, refiners, and consumers alike, the message is clear: crude is no longer just a commodity. It is a barometer of global instability. Until OPEC, China, and geopolitics align toward predictability—a highly unlikely prospect—oil will remain the most uncertain asset of our time.

 

Can Washington Buy Hezbollah Guns?

Washington believes US$230 million can buy stability by disarming Hezbollah and empowering Lebanon’s army. In a country where weapons are seen as survival, and aid is tied to political strings, dollars may deepen divisions rather than deliver sovereignty.

United States is betting big on Lebanon. Its latest US$230 million aid package, funneled into the army and security forces, comes with one not-so-hidden agenda: disarm Hezbollah. For Washington, the formula is simple—dollars for sovereignty. Strengthen the Lebanese Armed Forces, dismantle weapons caches, tie reconstruction money to compliance, and Hezbollah will finally be forced under state control.

But Hezbollah is not a street gang waiting to be bought out. It is Lebanon’s most powerful political and military force, one that commands loyalty, provides services, and—above all—wields arms that many see as the only shield against Israel. When bombs fell on Beirut in 2006, it was not the Lebanese army that stood firm, but Hezbollah. To expect the group to trade rockets for US money is to misunderstand its very identity.

The US plan hinges on a fragile bargain: Hezbollah hands over weapons, Israel halts incursions, and Lebanon begins to rebuild. Yet history says otherwise. Israeli jets still scream across Lebanese skies with impunity. Promises of restraint ring hollow to a movement born from decades of occupation and war. In Hezbollah’s calculus, surrendering arms is not reform—it is suicide.

Washington frames this as state-building. Hezbollah calls it blackmail. By tying basic recovery—electricity, infrastructure, reconstruction—to disarmament, the US is accused of holding Lebanon’s survival hostage. Aid, in this view, is just another weapon of war, designed to weaken “the resistance” where bombs failed.

The clash is stark: United States believes money can buy stability; Hezbollah insists weapons guarantee it. In between stands a broken Lebanon, desperate for relief yet divided over who really protects it.

If Washington thinks $230 million will unravel a militia that survived wars, sanctions, and sieges, it may soon discover that in Lebanon, guns are worth more than dollars—and sovereignty is not for sale.

 

Flotilla Confrontation: Security Meets Humanitarian Defiance

The clash on the Mediterranean was more than a naval interception; it was the meeting point of two uncompromising mindsets. Israel, driven by security fears, saw the flotilla as a breach of sovereignty. The organizers, propelled by humanitarian urgency, saw it as a moral duty. The confrontation at sea exposed the deeper conflict on land—between a state that insists on safety at all costs and activists who believe silence in the face of suffering is complicity.

For Israel, the blockade of Gaza is not an option but a shield. In its worldview, Gaza is governed by Hamas, a militant force openly hostile to the Jewish state. Every unchecked shipment, Israel argues, risks smuggling in rockets or arms. From this vantage point, the blockade is an unfortunate but necessary firewall. The flotilla’s defiance, therefore, was not seen as a humanitarian act but as a provocation, a test of sovereignty. Intercepting the vessels was, in Israel’s eyes, enforcement of deterrence—not an act of aggression.

The flotilla organizers saw the situation through a very different lens. For them, Gaza is less about security threats and more about a humanitarian catastrophe. Years of blockade have left two million people trapped in an economic and social vise. The organizers framed their mission not simply as aid delivery but as civil disobedience at sea. Their ships carried food and medicine, but more importantly, they carried symbolism—an attempt to shine a spotlight on suffering and force the international community to reckon with policies they believe amount to collective punishment.

Both narratives have their logic, and both are uncompromising. Israel’s security calculus is rooted in bitter experience of rocket fire and attacks, leaving little room for risk-taking. The activists, meanwhile, operate on the conviction that moral duty overrides political boundaries. Neither side expected to concede; both expected to be challenged.

That is why confrontation was inevitable. The tragedy is that it deepened rather than bridged the divide. Israel reinforced its image as uncompromising, while the activists underscored their point that humanitarian access is blocked. In the end, the flotilla standoff revealed more than a naval skirmish—it laid bare the gulf between security fears and humanitarian imperatives, a gulf the world has yet to find the courage to close.

Can Pakistan’s Stock Market Euphoria Last?

The Pakistan Stock Exchange (PSX) has turned into a theater of euphoria. In recent months, the KSE-100 has scaled historic highs, luring investors with the promise of easy gains and signaling a newfound confidence in the economy. The question now is not whether the rally has been spectacular, but whether it can last.

Several factors support the bulls. The State Bank’s shift toward monetary easing has reduced borrowing costs, drawing investors away from fixed income and into equities. Lower interest rates traditionally inflate valuations, and Pakistan is no exception. Add to this the IMF’s continued engagement and incremental fiscal discipline, and the picture looks markedly better than just two years ago when fears of default loomed large. International credit agencies have upgraded Pakistan’s outlook, further feeding optimism.

Sectors like banking, energy, and cement — heavyweights in the index — have reported improved earnings, lending substance to the rally. Market psychology is also playing its part; momentum has a way of sustaining itself, as more investors join in, driven by fear of missing out.

But euphoria has a habit of blinding participants to lurking dangers. Pakistan’s political fragility remains the most potent risk. A sudden shift in the governing coalition, renewed street agitation, or policy U-turns could shake investor confidence overnight. Likewise, the country’s external account remains precarious; a spike in oil prices or weakening of the rupee could unravel the fragile stability. Inflation, though easing, is hardly conquered, and any resurgence would force the central bank back into tightening mode.

Overvaluation is another trap. After such a steep run, some stocks now trade at stretched multiples. Unless earnings growth matches expectations, disappointment could trigger a sell-off. And with global financial markets on edge over interest rate uncertainty and geopolitical flare-ups, Pakistan is hardly insulated from external shocks.

Trump’s Gaza Plan: A Critical Evaluation

US President Donald Trump has recently unveiled Gaza proposal aiming at an immediate cessation of large-scale hostilities, swift hostage returns, and an internationally supervised transitional mechanism for aid and reconstruction. The plan’s clarity of purpose and rapid timeline respond to urgent humanitarian imperatives and reflect the international community’s appetite to halt suffering quickly. Yet clarity is not the same as feasibility.

The plan conditions major concessions — disarmament, handover of local administration, and the release of hostages within days — on compliance by an armed movement embedded in a densely populated territory. Observers warn that such hard deadlines may be operationally impractical and risk provoking standoffs rather than negotiated de-escalation.

Legitimacy is another central issue. The initiative was advanced by external actors and endorsed publicly by several regional capitals and Israel, but it was not the product of inclusive negotiation with the full range of Palestinian stakeholders. That gap raises questions about local ownership, representation, and the long-term acceptability of an externally driven transitional authority.

Equally important are enforcement and verification. The plan sketches mechanisms for aid flow and prisoner exchanges but leaves underdefined who will verify disarmament, guarantee security guarantees, or arbitrate disputes if steps stall. Without robust, impartial monitoring and contingent incentives, incremental breaches could quickly unravel fragile progress.

Finally, the proposal’s political balance matters. Supporters argue it prioritizes an end to violence and rapid relief; critics say it privileges immediate security outcomes over parallel political guarantees that address grievances and political rights.

A genuinely neutral approach would pair urgent humanitarian measures with credible, rights-based pathways for political resolution and accountability.

Recommendation: recast the plan as phased and conditional — immediate, verified humanitarian pauses; monitored hostage-prisoner exchanges; a time-bound international oversight role with clear benchmarks; and a parallel roadmap for political rights and reconstruction commitments.

Only by combining urgency with inclusivity and impartial verification can any proposal hope to deliver sustainable stability rather than a temporary reprieve.

Ultimately, durable peace will require compromises by all parties, sustained regional cooperation, and transparent international oversight to maintain trust and mechanisms for accountability.

Understanding Netanyahu’s Resistance to Palestinian Statehood Recognition

The question of Palestinian statehood continues to dominate debates at the United Nations, where an increasing number of countries have formally recognized Palestine. However, Israeli Prime Minister Benjamin Netanyahu remains firmly opposed. His resistance is not only political but also rooted in a complex intersection of security concerns, territorial disputes, and domestic dynamics.

From a security perspective, Israel under Netanyahu argues that recognition of a Palestinian state could pose serious risks. The Israeli leadership contends that without robust guarantees, such recognition might empower militant groups, potentially turning Palestinian territory into a base for armed activity against Israel. This framing allows Netanyahu to position statehood recognition as a matter of national defense rather than political compromise.

A second dimension involves the status of land and settlements. Over the years, Israeli settlements in the West Bank have expanded significantly. International recognition of Palestine would cast these settlements in an unequivocally illegal light under international law, creating new diplomatic and legal challenges for Israel. For Netanyahu, resisting recognition is tied directly to maintaining territorial control and avoiding pressures to dismantle or freeze settlement activity.

Domestic politics also play a decisive role. Netanyahu’s governing coalitions have often included right-wing and religious nationalist parties that categorically reject Palestinian statehood. Within this political framework, any concession toward recognition could destabilize his government. Thus, opposition to statehood is not only ideological but also a strategy of political survival.

Finally, Netanyahu’s regional strategy favors normalization with Arab states without linking it directly to Palestinian aspirations. The Abraham Accords exemplify this approach, where Israel advanced ties with Gulf states while leaving the Palestinian issue unresolved. Recognition of Palestine at the UN challenges this strategy by reasserting the centrality of the Palestinian question in Middle Eastern politics.

Netanyahu’s opposition to Palestinian statehood recognition can be understood as the convergence of security considerations, settlement policies, domestic political imperatives, and regional strategy. It reflects Israel’s broader attempt to manage the Palestinian question on its own terms, rather than through international forums.