PSX benchmark index closes almost flat

Pakistan Stock Exchange (PSX) gained 408 points or 0.24%WoW to closing at 167,086 points on Friday, December 05, 2025. The appointment of Field Marshal Asim Munir as Chief of Defense Forces and the extension in maturity of Saudi Arabia’s US$3.0 billion deposit helped settle mid-week volatility.

Market participation dropped by 22%WoW due to volatility, with average daily traded volume declining to 863 million shares from 1.1 billion shares in the prior week.

On the external front, trade deficit widened by 33%YoY to US$2.9 billion in November 2025, driven by 5%YoY increase in imports and 15%YoY decline in exports.

Headline inflation remained in line with expectations at 6.1%YoY for November 2025.

Cement and E&P contributed the most to index’s gains, while cement sector rallied on the back of 2% YoY growth in local dispatches and LUCK’s foreign expansion announcement, while E&P sector advanced as LNG diversion plan progressed and the auction of offshore blocks attracting Turkish investment.

Foreign exchange reserves held by State Bank of Pakistan (SBP) increased by US$14 million to US$14.6 billion as of November 28, 2025.

Other major news flow during the week included: 1) Petroleum product sales drop 10% YoY in November, 2) FBR faces PKR143 billion shortfall in achieving November 2025 target, 3) Refinery upliftment jumps 40%YoY in November, 4) Wheat sowing likely to beat target in Punjab, and 5) Business confidence rises to 22%, as per OICCI.

Inv. Banks/ Cos, Refinery, and Cement were amongst the top performing sectors while, Automobile parts & assembler, Textile spinning, and Fertilizer were among the laggards.

Major buying was recorded by Individuals and Mutual Funds with a net buy of US$17.8 million and US$12.0 million, respectively. On the other hand, Insurance and Foreigners were major sellers with net sell of US$32.4 million and US$9.7 million, respectively.

Top performing scrips of the week were: BNWM, PTC, SRVI, PIOC, and TRG, while laggards included: THALL, AICL, HUMNL, HGFA, and FHAM.

According to AKD Securities the momentum in the benchmark index of PSX is likely to continue given successful IMF Executive Board approval of the IMF’s second review, minimal flood impact and improved credit ratings by global agencies amid falling fixed income yields.

Investors’ sentiment 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 also supported by the lack of alternative investment avenues and the attractive valuation of local equities.

Top picks of AKD Securities include: MEBL, MCB, HBL, OGDC, PPL, PSO, ENGROH, LUCK, DGKC, FCCL, ILP, and INDU.

Damages caused by Iranian attack to strategic installations forced Israel to ceasefire

The ceasefire Israel reluctantly embraced did not emerge from any humanitarian awakening. It was triggered by the sobering reality that Iranian ballistic missiles had successfully targeted some of Israel’s most sensitive strategic installations. A fresh State Comptroller report details how institutional negligence allowed these vulnerabilities to fester until they exploded into national exposure.

During the June conflict, Iran managed to breach Israel’s sophisticated air-defense systems and strike core facilities: Beersheba’s medical center, the Bazan oil refinery in Haifa, and crucial laboratories at the Weizmann Institute. These were not incidental targets—they were pillars of Israel’s medical, energy, and scientific infrastructure. Their exposure underscored a deeper structural failure.

Comptroller Matanyahu Englman’s report shows that warnings about these vulnerabilities date back to 2011. A detailed assessment issued in 2020 was also ignored. Despite years of alerts, the Defense Ministry, IDF, National Security Council, and Finance Ministry never created a coherent legal or operational framework to physically protect these sites. Instead, bureaucratic turf wars and funding disputes ensured that little to nothing was done.

Englman stressed a fundamental distinction: Israel’s air-defense umbrella—Iron Dome, David’s Sling, Arrow—may intercept threats, but no system is airtight. Once a missile breaks through, physical defenses must protect critical installations. Yet these were virtually nonexistent. Hamas, Hezbollah, the Houthis, and Iran all managed to exploit this weakness during the war.

Even after large-scale attacks began, the Defense Ministry continued to delay decisions. Committees met without purpose, deadlines were missed, and responsibility was shuffled between agencies. It was only in late 2024—when senior officials were preparing to depart—that any meaningful action started.

Once Iranian missiles struck strategic sites, Israeli leaders recognized that further escalation risked even more damaging hits. The country could not afford to expose additional “underdeclared” facilities, nor could its leadership sustain the political and economic fallout of deeper infrastructure disruption.

Israel did not choose ceasefire out of compassion for Gaza. It chose it because Iranian pressure exposed vulnerabilities its leadership could no longer hide.

When Arms Thrive - Humanity Pays Price

As missiles streak across skies from Gaza to Ukraine, another explosion is happening far from the battlefield — an explosion of profits. The global arms industry has just booked its highest revenue ever recorded, turning geopolitical turmoil into an unprecedented financial windfall.

According to the latest Stockholm International Peace Research Institute (SIPRI) report, the world’s top 100 arms manufacturers earned a staggering US$679 billion in 2024 — the highest figure in more than 35 years of monitoring. The trend is unmistakable - the more insecure the world becomes, the richer the military-industrial complex grows.

SIPRI notes that rising geopolitical tensions, nuclear weapons modernization, and sustained conflicts drove the bulk of the increase. A remarkable 77 of the Top 100 companies boosted their revenues, and 42 recorded double-digit growth.

For the first time since 2018, all five of the largest defence companies — Lockheed Martin, RTX, Northrop Grumman, BAE Systems and General Dynamics — expanded their earnings simultaneously, raking in a combined US$215 billion. Four of these giants are American; the fifth is British.

Europe and North America led the surge, but increases were registered across almost all regions — except Asia and Oceania, where Chinese industry struggles dragged totals down.

One of the most troubling profit spikes came from the Gaza war. Israel’s leading arms producers — Elbit Systems, Israel Aerospace Industries, and Rafael Advanced Defense Systems — collectively increased revenues by 16% to US$16.2 billion, as the assault on the enclave killed tens of thousands of Palestinians and flattened civilian infrastructure. The numbers expose a stark reality - war zones are becoming revenue streams.

In the United States — responsible for nearly half of all global arms revenue — a new entrant emerged. SpaceX, owned by billionaire Elon Musk, entered the Top 100 for the first time, more than doubling its arms revenue to US$1.8 billion. Musk’s deep alignment with US political power, including major donations to Donald Trump and Republican candidates, underscores how closely defence profits now intertwine with political influence.

The SIPRI figures raise a sobering question, when conflict becomes profitable, who is truly invested in peace?

Winner and Loser of G20 Meeting in South Africa

Global summits rarely deliver thunderclaps, but they often reveal the silent shifts shaping the world. The G20 meeting in South Africa did exactly that. What appeared, on the surface, to be another routine gathering of world leaders actually exposed the changing geometry of global power—who is rising, who is tightening their grip, and who is quietly losing influence. Behind the polished protocol and diplomatic smiles, the summit told a far more compelling story.

The most surprising winner was South Africa itself. For decades, African hosts have been expected to simply provide the stage while major powers dominate the script. This time, Pretoria seized the pen. It pushed Africa’s priorities—climate financing, debt restructuring, fairer market access—onto the centre table with unusual assertiveness. South Africa didn’t just moderate the discussion; it shaped its direction. The message was unmistakable - Africa is no longer willing to play the audience in global decision-making.

China emerged as another strategic winner. While Western delegations appeared divided and preoccupied with their internal political headaches, Beijing arrived with clarity and purpose. Its emphasis on development partnerships and a more inclusive economic order resonated strongly with emerging economies hungry for alternatives. China did not need to dominate the summit; it simply positioned itself as the reliable, steady voice amid Western hesitation.

The United States found itself on the losing side. Its delegation carried the weight of domestic polarization, resulting in cautious, often diluted messaging. Washington struggled to offer bold commitments—on climate, investment, or economic cooperation. For a country accustomed to setting the global agenda, the lack of strategic energy was hard to ignore.

Europe performed slightly better but still fell short. Its rhetoric on rules-based order and environmental responsibility was admirable, yet it lacked the financial muscle to persuade. Fine principles without practical incentives seldom win followers.

In the end, the G20 meeting in South Africa did not merely debate global problems; it exposed a shifting world. Africa is stepping forward, China is consolidating influence, and traditional Western powers are wrestling with diminishing authority. The polite diplomacy could not hide that the global balance is changing—fast.

PSX benchmark index up 2.8%WoW

Pakistan Stock Exchange (PSX) continued its bullish momentum during the week, driven by investor optimism following the announcement that the IMF Executive Board will meet on December 08, 2025, to consider and approve third tranche of US$1.2 billion for Pakistan.

The benchmark index was up 4,575 points during the week, up 2.8%WoW, to close at 166,678 points. However, market participation weakened by 14.2% WoW with average daily traded volume down to 1.1 billion shares, as compared to 1.3 billion shares in the prior week.

Sentiment further boosted after Petroleum Minister Ali Pervaiz Malik announced that Reko Diq is close to achieving financial close with US$3.5 billion in loans secured, sparking a strong rally in the Oil and Gas Exploration sector. The inclusion of FFC in the Shariah-compliant index fueled a surge in the scrip.

Foreign exchange reserves held by State Bank of Pakistan (SBP) increased by US$9 million to US$14.6 billion as of Nov 21, 2025.

Other major news flow during the week included, 1) SIFC unveils business-friendly roadmap, 2) PM Shehbaz eyes US$1 billion trade with Bahrain in three years, 3) Chinese group to establish US$1.5 billion industrial park on 300 acres, 4) Food Exhibition 2025 draws strong international interest as B2B deals reach US$615 million, and 5) IMF recognizes Competition Commission of Pakistan’s major turnaround.

Leather & Tanneries, Fertilizer, Commercial Banks, Technology & Communication and Cement were amongst the top performers, while Jute, Modarabas, Refinery, Leasing Companies and Glass & Ceramics were amongst the worst performers.

Flow wise, major buying was recorded by Banks/ DFIs and Mutual Funds with a net buy of US$14.5 million and US$9.5 million during the week, respectively. Foreigners & Individuals were major sellers with net sell of US$12.9 million and US$9.1 million, respectively.

Top performing scrips of the week were: SSGC, SRVI, PIOC, HUMNL and FATIMA, while laggards included: PKGP, BWCL, YOUW, CNERGY and ATRL.

AKD Securities foresee the momentum at PSX to continue given successful IMF Executive Board approval 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 US and Saudi Arabia.

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

Top picks of AKD Securities include: MEBL, MCB, HBL, OGDC, PPL, PSO, ENGROH, LUCK, DGKC, FCCL, and INDU.

Trump’s Second Term Is Damaging US Image

As Donald Trump settles further into his second term, concerns are mounting among observers who expected the United States to restore steadiness in its global leadership. Many Americans who voted for him again may have hoped for economic revival or decisive action, yet the outcomes so far have been uneven at best and deeply troubling at worst. His first term already raised questions about the quality of decision-making in Washington, but the second term has amplified those doubts.

To be fair, no US president operates in isolation. The power centres of oil conglomerates, the military-industrial complex, and Wall Street—longstanding financiers of electoral campaigns—shape the contours of policymaking. This is not unique to Trump; it reflects a broader structural reality embedded in the American political system. Likewise, administrative norms in any government impose limits, compelling leaders to follow certain procedures irrespective of personal preference.

What distinguishes Trump, is his persistent disregard for these constraints. Many of his executive actions—whether aggressive tariff regimes, abrupt withdrawal from international agreements, or confrontational moves in international waters—reflect a governing style marked by impulsiveness rather than foresight. These decisions have often produced more disruption than strategic advantage, leaving allies unsettled and adversaries emboldened.

The United States continues to project itself as the world’s largest and most resilient democracy, yet Trump’s leadership is testing that claim. His tendency to bypass institutional checks and frame governance as a personal mandate creates the perception of a leader more interested in consolidating authority than strengthening democratic norms. While he may not be a “king” in the literal sense, some of his actions signal an uncomfortable tilt toward unilateralism.

The cost of this approach is increasingly visible on the global stage. Instead of enhancing America’s influence, it has chipped away at its credibility. Partner nations now question Washington’s consistency, while global institutions struggle to anticipate US positions on critical issues. For a country that built its reputation on predictability and democratic stewardship, this erosion is significant.

If the United States wishes to reclaim moral authority and strategic stability, its leadership must demonstrate that democracy is anchored in institutions—not in the whims of an individual.

Can Iran Revive a Dormant ECO?

Iran’s renewed diplomatic activity suggests a determined effort to resuscitate the long-underperforming Economic Cooperation Organization (ECO). The arrival of Iranian Minister for Industry, Mining and Trade, Seyed Mohammad Atabak in Istanbul—where ECO ministers gathered at this level for the first time in two decades—reflects a deliberate push by Tehran to reposition the bloc as a relevant regional economic platform. For Iran, this moment is less about protocol and more about strategic necessity.

At the heart of the Istanbul discussions is a long-awaited effort to revisit trade agreements, especially tariff reductions aimed at boosting intra-ECO commerce. For Iran, which has endured years of Western sanctions and now sees minimal prospects for diplomatic relief, regional economic arrangements have become a priority. The US-Israeli strikes on Iranian infrastructure earlier this year further hardened Tehran’s conviction that Western partners cannot be relied upon for economic stability.

The second Iran-ECO Conference held in Tehran in September clearly signaled Iran’s aspirations. Foreign Minister Abbas Araghchi openly stated that the current level of ECO cooperation “does not match the enormous capacities” of its member states. His remarks were not diplomatic rhetoric— but a candid assessment of a bloc that has failed to convert geography into economic strength. Stretching across South, Central, and West Asia, ECO should have been a natural trade corridor. Instead, it has remained largely dormant.

This renewed push comes amid a shifting global economic order. As economist Majid Shakeri points out, the US — once the world’s “demander of last resort”—no longer plays its traditional role. Washington’s declining appetite for foreign goods and its reliance on punitive tariffs have weakened the post-WWII economic framework. For ECO members, this creates both a void and an opportunity: if global structures are eroding, regional alliances must step in.

Iran seems ready to do the heavy lifting. By pushing for tariff reforms, expanded connectivity, and practical cooperation, Tehran aims to keep ECO from fading into geopolitical irrelevance. Whether the other member states share the same urgency remains uncertain. But one thing is clear: Iran is positioning itself as the driving force behind ECO’s overdue revival.