KARACHI: The Pakistan Stock Exchange (PSX) closed the week on a historic high, buoyed by a blend of investor optimism, strong macroeconomic data, and anticipation of robust corporate earnings.
The benchmark KSE-100 Index surged to an all-time closing level of 138,597 points, marking a weekly gain of 3.2 percent, or 4,297 points—the highest ever in its trading history.
This sharp upward trajectory came despite a notable decline in market participation, as daily trading volumes fell nearly 20 percent week-on-week to 763 million shares. Yet the lower volumes were overshadowed by stronger fundamentals and a clear shift in sentiment, driven by what analysts describe as a convergence of supportive macroeconomic indicators and policy clarity.
Market capitalization reflected the broader rally, with the PSX’s total market value increasing to Rs 16.517 trillion (approximately $57.98 billion), up from Rs 16.288 trillion ($57.26 billion) the previous week.
Analysts noted that the sentiment on the trading floor was distinctly optimistic, despite foreign institutional selling and the usual summer lull in investor activity.
The optimism was deeply rooted in tangible progress on the economic front. For the first time in fourteen years, Pakistan posted a current account surplus—$328 million for June 2025—thanks largely to a surge in remittances and disciplined external spending. This pushed the full fiscal year surplus to $2.1 billion, a remarkable turnaround from the $2.07 billion deficit posted in FY24.
Also the remittances for FY25 had risen 27 percent year-on-year, hitting a total of $38.3 billion, bolstering the external account and relieving pressure on foreign exchange reserves, which remained steady at $14.5 billion during the week.
The positive macroeconomic momentum was complemented by developments in capital markets. In the government’s latest fixed-income auction, Rs 342 billion was raised against a target of Rs 300 billion, with cut-off yields easing by 30 to 54 basis points across tenors—an encouraging sign that inflation expectations are stabilizing and interest rates may gradually decline.
Meanwhile, foreign direct investment for June clocked in at $207 million, slightly below May’s inflow of $217 million but consistent with the steady stream of capital flowing into key sectors like telecom, banking, and infrastructure. This, along with the government’s progress on privatization—most notably, plans to finalize the sale of Pakistan International Airlines (PIA) within two to three months—added to investor confidence.
From a sectoral standpoint, fertilizers and banks led the charge. According to JS Global, two names alone—Fauji Fertilizer Company (FFC) and United Bank Limited (UBL)—accounted for nearly 3,000 points of the KSE-100’s weekly rise.
Company-wise, Pakistan Services Limited (PSEL) was the top gainer of the week, soaring 55.4 percent, followed by Allied Bank Limited (ABL) with a 23.3 percent gain and JVDC with 18.6 percent. Other notable performers included FFC, which rose 15.7 percent, and PIBTL, up 13.5 percent.
However, among the laggards were Searle Pakistan, down 9.1percent, Kohat Cement 7.5 percent, and Bannu Wollen Mills limited 6.8 percent.
On the currency front, the Pakistani rupee showed some weakness against the U.S. dollar, closing the week at Rs 284.87. Despite this marginal depreciation, the SBP’s reserves increased by $232 million week-on-week, providing a cushion against volatility.
In terms of market breadth, investor participation remained concentrated in key sectors such as investment banks, commercial banks, technology and communication, and power.
Analysts noted that as Pakistan navigates a delicate balance of macroeconomic stabilization and structural reform, the equity market appears to be regaining its stature as a barometer of investor confidence and policy credibility. While challenges remain—chiefly in managing external debt repayments of over $23 billion in the current fiscal year—the tone from investors and institutions alike is increasingly one of cautious optimism.
Copyright Business Recorder, 2025
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