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.

 

Trump’s Tariffs: Open Defiance of WTO Rules

“The WTO’s silence in the face of US defiance marks the slow death of multilateralism.”

When power tramples principle, the rulebook becomes meaningless. The United States, once the architect of global trade discipline, now stands as its most brazen violator. President Trump’s tariff crusade has reduced the WTO’s founding ideals to diplomatic theatre.

When the World Trade Organization (WTO) was created, it was supposed to end the era of arbitrary trade wars. Countries pledged to respect the Most-Favored-Nation principle — no discrimination, no selective punishment. Yet today, that rulebook lies in tatters, largely because the United States, the self-proclaimed guardian of free trade, has chosen to ignore it.

President Donald Trump’s latest wave of tariffs on steel, aluminum, and Chinese imports is nothing short of a declaration of defiance. Cloaked in the language of “national security,” these measures are neither lawful nor justified under WTO norms. These are pure economic bullying — a tactic to reassert American dominance under the guise of protecting domestic jobs.

Let’s be clear, the WTO’s Article XXI, which allows exceptions for national security, was never meant to give license for economic intimidation. Trump’s use of it is a cynical distortion, designed not to protect US borders but to weaponize trade policy. It exposes the hypocrisy of Washington preaching free markets abroad while practicing protectionism at home.

WTO panels have already ruled against such tariffs, but the US has paralyzed the system by blocking the appointment of judges to the Appellate Body — effectively ensuring no verdict can ever be enforced. This deliberate sabotage turns the WTO into a toothless watchdog, helpless against the very member it was meant to discipline.

The tragedy is not merely in Washington’s defiance but in the world’s silence. Each unjustified tariff erodes another layer of global trust, while the WTO watches from the sidelines, stripped of authority. If the international community fails to challenge US economic unilateralism now, the collapse of the multilateral trading order will not be a distant fear — it will be a fait accompli.

 

Fixing Wheat Support Price: A Sovereign Right, Not A Privilege

When an external lender begins dictating what price Pakistan should pay its farmers, it crosses from advice into interference. Fixing the support price of wheat — the nation’s staple crop — is a sovereign right, not a privilege granted by the IMF. To read details click https://shkazmipk.com/achieving-food-security-6/

Fighting Without Fighting: Super Powers Wage War by Other Means

Wars are no longer fought only on battlefields. The twenty-first century has transformed the nature of conflict: the weapons are now economic sanctions, cyberattacks, and proxy alliances, while the targets are national economies and public perceptions. The art of modern warfare lies not in destroying armies but in destabilizing societies. This is the new face of power — fighting without fighting.

During the Cold War, the United States and the Soviet Union perfected the strategy of indirect confrontation. They waged proxy wars in Korea, Vietnam, and Afghanistan, where others fought on their behalf. That same philosophy now defines global politics once again. Today’s superpowers — primarily the United States, China, and Russia — prefer to engage through economic blockades, digital espionage, and information manipulation rather than direct military confrontation. The logic is simple, global integration makes total war too costly to win and too dangerous to survive.

Economic warfare has become the preferred tool. The United States uses financial sanctions and trade restrictions as strategic weapons. Russia, in turn, employs energy supplies as instruments of coercion. China manipulates market access and technology exports to shape global alignments. In this arena, a single executive order or export ban can inflict more damage than a missile strike. The global financial system has become a silent battlefield, where currencies, commodities, and credit replace tanks and artillery.

Cyber warfare adds another invisible dimension. State-backed hackers can paralyze banking systems, shut down power grids, or steal sensitive data — all without firing a shot.

The 2022–24 conflict in Ukraine, for instance, has shown how digital attacks and disinformation can amplify physical wars. The battlefield now includes social media platforms and data networks, where narratives are manufactured and public opinion is weaponized.

Meanwhile, proxy conflicts continue to shape regional politics — in the Middle East, Africa, and Eastern Europe. These low-intensity wars allow great powers to test new technologies, weaken rivals, and expand influence without bearing the political cost of direct involvement. The blood is local, but the strategy is global.

The danger is that “war without war” is harder to detect and even harder to end. Economic sanctions, once imposed, linger for years; cyber weapons, once unleashed, spread uncontrollably. The absence of visible warfare creates a dangerous illusion of peace while societies quietly erode from within.

In this new world order, victory is no longer measured by territory captured but by systems disrupted, economies weakened, and narratives controlled. The future of conflict will not be marked by explosions but by silence — the silence of power grids failing, economies collapsing, and truths being rewritten.

The War That Will Never Be Fought — But Never End

The United States and the Soviet Union never fought a direct war, and their modern successors — Washington and Moscow — are unlikely ever to do so. Both possess nuclear arsenals capable of ending human civilization within hours, a reality that forces restraint even in the fiercest confrontations. Yet, the absence of direct warfare does not mean peace. From Korea to Ukraine, the two powers have fought shadow wars through proxies, sanctions, and propaganda — proving that while a nuclear world discourages combat, it encourages competition without limits.

The Cold War, which dominated the second half of the twentieth century, was essentially a struggle for global dominance without direct confrontation. The US and USSR armed their allies, financed revolutions, and competed for ideological influence from Asia to Latin America. Conflicts such as Korea, Vietnam, and Afghanistan became testing grounds for superpower ambitions. Each side bled indirectly, ensuring that nuclear deterrence remained intact while smaller nations paid the human cost.

When the Soviet Union collapsed in 1991, many believed the Cold War had ended for good. But three decades later, the same strategic rivalry re-emerged — this time between the US and Russia. The Ukraine war has become the modern version of a Cold War battlefield. The US supplies advanced weapons, intelligence, and economic support to Kyiv, while Russia frames the conflict as a defensive war against NATO encirclement. Both powers fight fiercely, but indirectly, ensuring no direct clash between American and Russian troops.

The logic remains the same - nuclear deterrence equals survival. Direct war would mean destruction for both, leaving only proxy wars, cyber battles, and economic coercion as tools of power. Each side tests the other’s limits without crossing the line of mutual annihilation. The contest has moved from ideology to influence — from red flags and capitalism to control over energy routes, technology, and global alliances.

Even hawkish voices in Washington calling for tougher action against Moscow know the line that cannot be crossed. Sanctions may strangle economies; drones and missiles may change the battlefield; but a direct strike remains unthinkable. Moscow, too, understands this calculus. The nuclear shadow keeps both in check — unwilling to yield, yet unable to attack.

In truth, the Cold War never died; it simply evolved. The battlegrounds have changed, but the mindset remains: weaken the rival, avoid direct war, and dominate the narrative. Proxy adventurism — from Eastern Europe to cyberspace — will persist as the preferred weapon of choice. The world’s two great powers may never face each other openly, but their shadow duel ensures the war that will never be fought will also never end.

Investors to pay the price of gold bubble

Gold prices recorded the steepest daily fall in five years on Tuesday, as investors booked profits. Spot price was down 5.5% to a one-week low of US$4,115.26 per ounce at1745 GMT, its steepest fall since August 2020. Prices scaled an all-time peak of US$4,381.21 on Monday and have gained about 60% this year, bolstered by geopolitical and economic uncertainty, rate-cut bets and sustained central bank buying.

Readers may recall that in my post titled “Warning for Gold Investors” dated September 30, 2025 I had informed the investors taking significant position not to panic, but keep close watch on the commodity market, especially gold. By that time the precious metal had rallied more than 10% this month, but took a breather after reaching another record early Tuesday, last trading day of the month. The prospect of an imminent United States government shutdown added to the metal’s appeal as a safe haven investment. 

Gold’s dramatic fall has exposed the fragile foundations beneath its record-breaking rally. The message is clear: even gold, long considered a bastion of stability, is not immune to engineered market forces.

One cannot ignore the role of central banks in this saga. In recent months, major central banks ramped up gold purchases aggressively, creating artificial demand and fueling a meteoric rise in prices. While presented as prudent diversification and a hedge against inflation, these purchases effectively inflated a bubble, enticing private investors to chase gains without understanding the underlying dynamics.

Profit-taking by investors was inevitable once the price peaked. The frenzy generated by central banks had drawn private money into the market, but when the momentum stalled, those same investors rushed to lock in gains, triggering the sharp correction.

Compounding the drop, the US dollar strengthened, making gold more expensive for international buyers. Meanwhile, geopolitical tensions—the usual excuse for gold’s safe-haven appeal—have eased, and seasonal demand from India’s post-Diwali slowdown further weighed on the market. Analysts also note that prices had become technically overbought; the correction was overdue.

This episode exposes a fundamental truth - gold’s recent highs were less about organic demand and more about engineered interventions. Central banks, in effect, played puppeteer, manipulating sentiment while ordinary investors bore the brunt of volatility.

Despite the fall, gold remains up roughly 60% for the year. The long-term narrative of gold as a hedge against uncertainty remains, but this correction is a warning - markets can be steered to extremes by institutional players, and what shines today may be a bubble tomorrow. Investors chasing gold’s glitter must remember—it is not immune to human engineering.

Can Takaichi be “Iron Lady” of Japan?

Sanae Takaichi has won the parliamentary vote to become Japan’s prime minister, making her the first woman to clinch the nation’s top job in a country that ranks low in female political representation. Here’s a look at the new premier who’s an admirer of the hard-nosed politics of Iron Lady, Margaret Thatcher.

Her real challenge will not come from rivals or parliament — it will come from the economy. She could well become Japan’s Iron Lady, not through war or ideology, but through her ability to steer the country out of its prolonged economic stagnation.

Japan’s economy, once an emblem of post-war recovery and industrial excellence, has been losing momentum for decades. Aging demographics, shrinking productivity, and mounting debt have created a complex policy maze. The nation that built the world’s most efficient industries now faces declining competitiveness, reliance on imported energy, and a vulnerable yen. A true reformist must confront these realities with courage and consistency — qualities that define an iron leader.

The parallels with Margaret Thatcher are not misplaced. When Thatcher came to power, Britain was sinking under inflation, labor unrest, and fiscal weakness.

Similarly, Takaichi would need to challenge decades of bureaucratic comfort, revive investor confidence, and make painful structural reforms — even if those choices upset entrenched interests within her own party.

She has to focus on restoring economic sovereignty. Japan’s dependence on foreign energy and global supply chains exposes it to external shocks. A bold policy mix — energy diversification, digital transformation, and innovation-driven industrial growth — could gradually restore national resilience. Instead of expanding debt to stimulate demand, she may prefer fiscal prudence, targeted spending, and reforms that attract foreign investment without compromising independence.

At the same time, she has to navigate global economic warfare. In an era where sanctions, tariffs, and currency manipulation replace military confrontation, Japan is often caught between Washington’s strategic interests and Beijing’s market influence. Balancing both relationships without hurting Japan’s trade or technology sectors will require diplomatic finesse and strategic depth — the real test of her strength.

Internally, the toughest challenge will be political. Japan’s ruling establishment is dominated by conservative men who resist change. A woman at the top would have to prove that strength is not measured in volume but in vision — and that discipline and clarity are as powerful as confrontation.

If she succeeds, Japan could witness its own economic renaissance. Her iron resolve could redefine governance — less about charisma, more about competence. She would not be remembered for waging wars, but for rebuilding Japan’s confidence in its own economic future.

Japan does not need another populist; it needs a reformer with steel in her resolve and clarity in her economics. If that leader happens to be a woman, she may well be remembered as the Iron Lady who reshaped Japan — not through power, but through policy.