KARACHI: The Pakistan Stock Exchange (PSX) extended its bullish run for the eighth consecutive week, underpinned by Moody’s sovereign rating upgrade, strong corporate earnings and optimism over policy continuity. Despite intermittent volatility, the KSE-100 index touched an all-time high of 147,005 points during the four-day trading week before settling at 146,492 points on Friday, gaining 1,109 points or 0.8 per cent on a week-on-week basis.
Analysts attributed the uptrend largely to mutual fund buying and improved sentiment following Moody’s decision to raise Pakistan’s rating to Caa1 with a stable outlook from Caa2. The upgrade reflected progress on external buffers, fiscal consolidation and reforms under the IMF programme. The index’s resilience also mirrored a broader shift in market confidence, even as challenges such as circular debt payments and weak monthly auto sales weighed on specific sectors.
According to Topline Securities, the average daily traded volume rose 8pc week-on-week to 606 million shares, while the traded value increased 13pc to Rs40.6bn. However, participation was still 7pc lower compared with the prior week, indicating cautious optimism among investors.
AKD Securities noted that the market opened positively on the back of robust earnings announcements and speculation that the government may phase out the super tax over five years under its upcoming industrial policy. Nonetheless, delays in settling circular debt dented the exploration and production (E&P) and oil marketing company (OMC) sectors, dragging the index by 214 and 159 points, respectively.
Benchmark KSE 100 index gained 0.8pc to close at 146,492 points
Beyond the bourse, several developments influenced sentiment. The rupee appreciated for the fourth consecutive week, closing at 282.06 to the dollar, up 0.14pc week-on-week. Finance Minister Muhammad Aurangzeb indicated that Pakistan expects to secure the third $1bn IMF tranche soon.
Meanwhile, Prime Minister Shehbaz Sharif received an invitation from the Saudi crown prince to attend an investment conference. In parallel, Islamabad pressed Beijing for progress on the Gwadar plan, while power-sector circular debt fell to Rs1.61tr by June, offering some respite on the fiscal front.
On the trade front, Pakistani officials continued discussions with the United States over a prospective deal, while Washington designated the Balochistan Liberation Army (BLA) a terrorist organisation — a long-standing demand of Islamabad.
Sector-wise performance remained mixed. Leasing companies, textile spinning, and auto parts outperformed, rising 13.5pc, 7.7pc and 6.2pc respectively week-on-week. In contrast, woollen, jute, and OMC shares declined 5.7pc, 3.2pc and 2.7pc respectively. Flow-wise, banks and other organisations offloaded $9.8m and $4.2m worth of shares, while mutual funds absorbed most of the selling with a net purchase of $15.3m.
Among individual performers, Airlink led the market with a 19.7pc weekly gain, followed by Thal Ltd (16.8pc), Yousuf Weaving (15.1pc), Faysal Bank (8.7pc) and First Habib Modaraba (8.4pc). On the losing side, Unity Modaraba fell 8.3pc, Gadoon Textile Mills 7.8pc, PSX Ltd 5.9pc, Bannu Woollen 5.7pc and Pakistan Petroleum 4.7pc.
In the automotive sector, passenger car and LCV sales rose 28pc year-on-year in July to 11,034 units, though volumes plunged 49pc month-on-month due to high base effects and seasonal weakness. Oil production edged up 0.8pc week-on-week to 59,604 barrels per day, aided by higher output from Makori East and Nashpa fields.
Arif Habib Ltd said the KSE-100’s current forward price-to-earnings ratio stands at 7.45x for FY26, below its 10-year average of 8x, while offering a dividend yield of 6.8pc versus the historical average of 6.5pc. This, combined with the result season, is expected to keep select stocks in focus.
Looking ahead, brokerages expect the market to remain supported by earnings momentum, a benign interest rate outlook and improving liquidity in the energy chain. AKD Securities projected the index could reach 165,215 points by December, driven by strong bank returns, steady fertiliser earnings, and enhanced cash flows in E&Ps and OMCs. However, the sustainability of the rally will hinge on progress in resolving the circular debt and continued adherence to IMF-backed reforms.
Published in Dawn, August 17th, 2025