PSX benchmark index closed at an all-time high of 189,167

Pakistan Stock Exchange continued upward movement during the week, with benchmark index gaining 4,068 points or 2.2% WoW to close at an all-time high of 189,167 on Friday, January 24, 2026. Market participation also improved by 8.7%WoW, with average daily trading volume rising to 1.3 billion shares, as compared to 1.2 billion shares in the prior week.

Momentum was supported by easing geopolitical tensions and a decline in T-Bill yields to single-digit levels for the first time in four years.

Moreover, positive economic partnerships with China, US, Britain and Saudi Arabia are expected to further boost Pakistan’s economy.

On the macroeconomic front, current account deficit was recorded at US$244 million for December 2025, while FDI outflows were recorded at US$135 million.

Power generation rose 8.8%YoY at December end, while IT sector recorded highest ever monthly exports of US$437 million, up 26%YoY.

Foreign exchange reserves held by State Bank of Pakistan (SBP) increased by US$16 million to US$16.1 billion as of January 16, 3026, as a result PKR appreciated against the greenback during the week, closing the week at 279.86 PKR/ US$.

Other major news flow during the week included: 1) Pakistan, China sign US$4.5 billion farm deals, boosting jobs and food supply, 2) Pakistan signs Trump-led Board of Peace charter, 3) GoP working on proposals to reduce industrial power tariff, 4) Pakistan-Philippines can boost pharma trade to US$1 billion, and 5) Foreign firms repatriate US$1.6 billion during 1HFY26.

Refinery, Fertilizer, Leather & Tanneries, Insurance, Property were amongst the top performing sectors, while Transport, Jute, Woollen, Technology & Communication, and Engineering were amongst the laggards.

Major buying was recorded by Mutual Funds and Individuals with a net buy of US$22.1 million and US$11.5 million, respectively. Foreigners and Companies were major sellers with net sell of US$21.1 million and US$10.4 million.

Top performing scrips of the week were: AICL, ATRL, FATIMA, SAZEW, and ENGROH, while laggards included: PIOC, KTML, TGL, SYS, and PAEL.

AKD Securities foresees the positive momentum at PSX to continue due to further monetary easing driven by improving external account position and continuous focus on reforms amid political stability.

The brokerage house anticipates the benchmark index to rise to 263,800 by end December 2026.

Investors’ sentiments are expected to improve on the likelihood of foreign portfolio and direct investment flows, driven by improved relations with the United States and Saudi Arabia.

Top picks of the brokerage house are:  OGDC, PPL, UBL, MEBL, HBL, FFC, ENGROH, PSO, LUCK, FCCL, INDU, ILP and SYS.

US “armada” heading towards Middle East

US President Donald Trump said on Thursday a naval “armada” was heading toward the Middle East, as he renewed warnings to Tehran against killing protesters or restarting its nuclear program.

“We’re watching Iran,” Trump told reporters on Air Force One on Thursday as he flew back from the World Economic Forum in Davos, Switzerland.

“We have a big force going towards Iran,” Trump said.

“I’d rather not see anything happen, but we’re watching them very closely,” he said.

Trump’s announcement on the US naval buildup comes after he appeared to back-pedal last week on his threats of military action against Iran.

US officials said the aircraft carrier USS Abraham Lincoln and other assets would arrive in the Middle East in the coming days.

One official said additional air-defense systems were also being eyed for the Middle East, which could be critical to guard against any Iranian strike on US bases in the region.

The warships started moving from the Asia-Pacific last week as tensions between Iran and the United States soared following a severe crackdown on protests across Iran in recent months.

Trump had repeatedly threatened to intervene against Iran over the recent killings of protesters there but protests dwindled last week. The president backed away from his toughest rhetoric last week, claiming he had stopped executions of prisoners.

He repeated that claim on Thursday, saying Iran canceled nearly 840 hangings after his warnings.

"I said: 'If you hang those people, you're going to be hit harder than you've ever been hit. It'll make what we did to your Iran nuclear (program) look like peanuts,'" Trump said.

"At an hour before this horrible thing was going to take place, they canceled it," he said, calling it "a good sign."

The US military has in the past periodically surged forces to the Middle East at times of heightened tensions, moves that were often defensive.

However, the US military staged a major buildup last year ahead of its June strikes against Iran's nuclear program.

China’s muted response to US threats to attack Iran

China’s restrained reaction to fresh US threats against Iran is not a sign of indifference, weakness, or quiet acquiescence. Rather, it reflects a deliberate strategic calculation shaped by energy security, diplomatic doctrine, and Beijing’s evolving view of its role in the Middle East.

Chinese Foreign Minister Wang Yi’s recent phone call with his Iranian counterpart captured this posture succinctly. By opposing the “use or threat of force” and reaffirming dialogue over coercion, Beijing restated principles it has upheld for decades. What stood out was what China chose not to do: no sharp condemnation of Washington, no announcement of countermeasures, and no promise of tangible intervention.

This muted response is consistent with China’s long-standing policy of non-interference. Beijing has historically avoided entanglement in the internal politics of partner states, whether governed by hardliners or reformists. For China, regime type is secondary to sovereignty, stability, and continuity of cooperation. Iran is no exception.

Economic realities reinforce this caution. China buys over 80 percent of Iran’s oil exports and remains the world’s largest crude importer. Yet Beijing is acutely aware that overt political or security involvement could invite harsher Western sanctions at a time when it is already under pressure from Washington. Restraint, therefore, is not passivity but risk management.

Crucially, China has spent decades diversifying its energy sources precisely to reduce overdependence on politically volatile suppliers. As long as Iranian instability does not escalate into a blockade of the Strait of Hormuz or a collapse of Iran’s oil infrastructure, Beijing can absorb the shock. Iran’s reliance on shadow fleets and grey-zone trade has so far kept energy flows intact.

Beijing also appears relaxed about Iran’s internal political trajectory. A more pragmatic or even West-leaning leadership in Tehran would not necessarily undermine Chinese interests. Iran’s economic needs and China’s market size ensure a continued relationship, even if discounted oil disappears.

At a broader level, China is recalibrating its Middle East strategy. While its economic footprint is expanding amid a relative decline in US influence, Beijing remains unwilling to assume security responsibilities or confront Washington head-on. Verbal opposition, strategic ambiguity, and economic engagement remain its preferred tools.

In short, China is playing the long game. Its silence is not absence, but a calculated choice to protect interests without escalation — a reminder that in geopolitics, restraint can be as strategic as confrontation.

Japan a victim of US military industrial game

It is an uncomfortable but undeniable reality that a major driver of the US economy is the global sale of military hardware. Packaged as “security cooperation,” this system increasingly functions as a mechanism of dependency that serves America’s military industrial complex more than the security needs of its allies. A recent Nikkei Asia investigation into Japan’s undelivered US weapons orders exposes this imbalance with unusual clarity.

According to the report, Japan has placed 118 orders for US military equipment worth over US$7 billion that remain undelivered more than five years after contracts were signed. In several cases, the delays have forced Japan’s Self-Defense Forces to rely on aging platforms—the very problem these purchases were meant to address. This is not a bureaucratic mishap but a structural flaw in the US Foreign Military Sales (FMS) program.

Under FMS rules, buyers must pay in advance, while prices and delivery schedules remain estimates. Washington retains the right to prioritize its own military needs, a reality that has become more pronounced since the war in Ukraine. Weapons already paid for by allies can be diverted elsewhere, while client states are expected to wait patiently. The refund of surplus funds, often cited as evidence of fairness, does little to compensate for years of strategic uncertainty.

This arrangement increasingly resembles economic coercion. Countries are encouraged to replace “obsolete” systems even when existing hardware remains functional. The logic of modernization often aligns more closely with US defense contractors’ production cycles than with genuine threat assessments. The buyer’s ability—or even need—to deploy advanced systems becomes secondary.

Japan’s experience is particularly instructive. As a technologically advanced nation and a key US ally, Tokyo should, in theory, enjoy priority treatment. Its difficulties raise serious questions about the position of smaller or less influential buyers, for whom arms purchases can become sunk costs with limited security returns.

The Nikkei Asia findings should serve as a warning. Dependence on a single supplier whose economy is deeply tied to militarization carries inherent risks. Paying upfront for weapons that arrive late—or not at all—undermines both security and sovereignty. Japan’s US$7 billion backlog is not merely a logistical failure; it is a lesson in the real economics of buying American security.

Revoking Araghchi’s Davos invitation highlights blatant double standards

Iran’s Foreign Minister Abbas Araghchi has slammed the World Economic Forum (WEF) for revoking an invitation to the annual meeting in Davos over his country’s crackdown on recent protests, accusing the forum of applying “blatant double standards” and succumbing to political pressure from Israel.

The WEF confirmed that Araghchi will not attend this year’s summit, running until January 23, saying that “although he was invited last fall, the tragic loss of lives of civilians in Iran over the past few weeks means that it is not right for the Iranian government to be represented at Davos this year.”

Araghchi said in a post on X on Monday night that the decision was made by WEF “on the basis of lies and political pressure from Israel and its US-based proxies and apologists.”

Araghchi had been scheduled to speak on Tuesday during the summit at the Swiss ski resort town.

The Iranian minister criticized what he called the WEF’s “blatant double standards” for keeping an invitation open to Israel’s President Isaac Herzog despite international accusations of genocide of the Palestinians in Gaza.

Araghchi said the forum’s decision came even though “Israel's genocide of Palestinians and mass slaughter of 71,000 innocent people did not compel it to cancel any invitation extended to Israeli officials whatsoever.”

The WEF's decision comes as stability has been restored across Iran following a period of foreign-instigated unrest.

What began as peaceful protests late last month gradually turned violent, as rioters rampaged through cities across the country, killing security forces and attacking public infrastructure.

The foreign minister stressed that the Iranian government had to defend the people against “armed terrorists and ISIS-style killings" openly backed by the Israeli spy agency Mossad.

The US and Israel have acknowledged their direct involvement on the ground, with former US Secretary of State Mike Pompeo tweeting, "Happy New Year to every Iranian in the streets. Also, to every Mossad agent walking beside them."

Germany, one of the United States' closest and strongest allies in Europe, also stated its opposition to extending an invitation to Iranian officials.

The Munich Security Conference on Friday said it was also withdrawing an invitation to Araghchi. 

 

Davos: Where Rich Perfect Art of Making Poor Poorer

Every January, Davos becomes the moral capital of the global elite. Wrapped in snow, security, and self-congratulation, presidents, billionaires, CEOs, and financiers gather to discuss the fate of a world they rarely experience firsthand. The World Economic Forum presents this annual ritual as a platform for global problem-solving. In truth, Davos has evolved into a carefully managed performance—where concern is expressed, responsibility is deferred, and power remains untouched.

The language of Davos is polished and predictable. “Inclusive growth,” “stakeholder capitalism,” “climate action,” and “global resilience” dominate the agenda. Yet behind this vocabulary lies a stubborn reality - inequality is not shrinking, poverty is not disappearing, and wealth is concentrating at a historic pace. If Davos were effective, the results would speak for themselves, which do not.

What Davos offers is not solutions but comfort—comfort to those who already control capital, technology, and policy access. It is a space where elites reassure one another that the system is flawed but fundamentally sound, that disruption must be managed rather than allowed, and that reform should never threaten ownership or privilege. The poor are omnipresent in speeches and PowerPoint slides, but conspicuously absent from decision-making tables.

The real conversations happen away from the cameras. While developing countries are advised to embrace austerity, fiscal discipline, and structural reforms, multinational corporations negotiate tax privileges, regulatory flexibility, and public subsidies. Workers are told to reskill endlessly, while capital moves freely across borders, protected by legal regimes it helped design. Climate change is acknowledged, yet fossil fuel interests remain deeply embedded in the very forum that claims to champion sustainability.

The return of Donald Trump to global relevance this year did not disrupt Davos—it exposed it. Trump’s blunt nationalism and transactional worldview are often portrayed as an aberration, these are not. He merely articulates openly what Davos practices quietly - power first, profit always, and principles only when convenient. Trump is not the enemy of the Davos mindset; he is its unfiltered expression.

For the Global South, Davos has long been a lecture hall. Countries facing debt, inflation, and political instability are prescribed reforms that protect creditors and investors, rarely citizens. Poverty is treated as a technical problem rather than a political outcome. Inequality is acknowledged, but redistribution remains taboo.

Davos survives because it offers the illusion of responsibility without the cost of change. It turns global suffering into a networking opportunity and moral concern into a branding exercise. Dialogue replaces action; panels replace policy.

The uncomfortable conclusion is unavoidable: In Davos, the rich do not seriously debate how to uplift the poor. They refine strategies to manage inequality in ways that preserve their dominance—making the poor poorer not by conspiracy, but by design.

Donald Trump Was Obvious — America’s Failure Was Not

For many outside the United States, Donald Trump was never a mystery. He was not a political riddle, nor an accident of history. He was obvious. What remains difficult to comprehend is how Americans—armed with vast media, institutions, and self-proclaimed democratic wisdom—failed so spectacularly to read a man who telegraphed his intentions from day one.

Trump did not corrupt American politics; he exposed it. His vulgar language, narcissism, and open contempt for norms were treated as shocking deviations, when in reality they stripped away the hypocrisy that had long defined the American political class. Previous presidents were better spoken, better groomed, and far more dangerous. Trump merely said aloud what others executed quietly.

America loves to boast of its wealth, power, and moral leadership. Yet it ranks poorly on almost every measure of social well-being among developed nations. Its middle class is shrinking, its prisons are full, its cities decay behind corporate skyscrapers, and its wars have left entire regions in ruins. Trump did not create this decay; he became its loudest symptom.

From South Asia and the Middle East, Trump’s worldview was instantly recognizable. We have seen strongmen before—men who confuse volume with authority and cruelty with strength. His Islamophobic travel bans, diplomatic bullying, and transactional foreign policy were predictable, not surprising. What was astonishing was America’s theatrical outrage, as if this behavior had no roots in its own imperial history.

The American establishment preferred to obsess over Trump’s manners rather than confront its own crimes. It was easier to mock his vocabulary than to admit that earlier administrations destroyed Libya, destabilized the Middle East, enriched corporations, and abandoned their own citizens—all while maintaining respectable language.

I could read Donald Trump because I was never seduced by the American myth. Many Americans were. Trump shattered that illusion, and instead of facing the mirror, they blamed the reflection.

That Donald Trump became president is troubling. That America still refuses to accept what he revealed about itself is far worse.