Pakistan's stock market closed on a positive note in the outgoing week, where the KSE-100 index gained 1,762 points, or 1.6%, compared to the previous week and settled at 112,085.
Investor sentiment improved as Pakistan successfully met three out of the five key fiscal conditions set by the International Monetary Fund (IMF) for the first review of its $7 billion programme, according to media reports. Additionally, the MSCI announced changes to its global indices, with Pakistan's weight in the Frontier Market (FM) Standard Index being estimated at around 5.89%.
Economic indicators reflected mixed trends. Auto sales surged 65% month-on-month (MoM) to 17,010 units while remittances for January reached $3 billion, marking a 25% year-on-year (YoY) increase. However, the State Bank of Pakistan's (SBP) foreign exchange reserves dropped $252 million to $11.2 billion.
In the fixed-income market, the government raised Rs454 billion in a Pakistan Investment Bond (PIB) auction, exceeding its Rs350 billion target, while cut-off yields dipped one to 25 basis points across various tenors.
On the diplomatic front, the Turkish president visited Pakistan, reaffirming bilateral ties and envisioning a $5 billion trade target. Meanwhile, an IMF delegation arrived to conduct a Governance and Corruption Diagnostic Assessment and met the auditor general and the Federal Board of Revenue (FBR) to discuss audit transparency and tax digitalisation.
Foreign investors remained net sellers as they offloaded $5.7 million worth of shares, primarily in cement and banking sectors. Trading activity picked up, with average volumes rising 21% week-on-week (WoW) to 525 million shares and average traded value increasing 28.5% to $97.6 million.
Among other key developments, Barkat Frisian IPO was set to raise Rs1.23 billion and banks' investment in government securities reached Rs26 trillion.
On a day-on-day basis, the PSX on Monday made a notable recovery in an earnings season rally as investors closely monitored progress on key IMF targets such as the primary budget surplus and provincial net revenue collection. The KSE-100 index settled at 111,378, up 1,055 points.
On the second trading day, the bourse again closed bullish, where investors took encouragement from robust economic data, including a 25% YoY surge in remittances that reached $3 billion in January 2025. The index, after touching intra-day high of 1,855 points, settled at 113,010, an increase of 1,632 points.
On Wednesday, the PSX experienced a volatile session, with the benchmark KSE-100 index showing a see-saw pattern throughout the day. Concerns about foreign debt repayments, the upcoming EU review of Pakistan's GSP+ status and rising political noise created a perfect storm, all contributing to a negative close. The index recorded a slight decline of 85 points.
On the second last day, a range-bound session marked trading at the stock market as investor sentiment remained mixed in the corporate earnings season. Though the KSE-100 kicked off proceedings on a positive note, it posted a loss of 361 points to 112,564.08.
On Friday, the index posted a decline of 478.78 points and settled at 112,085.30 – its third consecutive session in the red – as institutional profit-taking in blue-chip stocks and global market jitters weighed on market sentiment.
Arif Habib Limited (AHL) wrote in its report that the stock market started on a positive note as Pakistan successfully met three out of the five key fiscal conditions set by the IMF for the first review.
Meanwhile, the MSCI announced changes to its global indices, with Pakistan's weight in the FM Standard Index expected to be around 5.89%.
During the week, a PIB auction was held in which the SBP raised Rs454 billion and cut-off yields across various tenors declined one to 25 basis points. Pakistani rupee closed at Rs279.21 against the US dollar, appreciating Rs0.16, or 0.06% WoW, it said.
Sector-wise, positive contribution came from cement (975 points), fertiliser (532 points), power generation and distribution (156 points), oil and gas marketing companies (145 points) and miscellaneous (106 points). Stock-wise, positive contributors were Lucky Cement (856 points), Fauji Fertiliser Company (381 points), Hubco (206 points), Mari Petroleum (167 points) and Engro Fertilisers (153 points), AHL added.
JS Global Deputy Head of Research Muhammad Waqas Ghani wrote that the KSE-100 showed recovery this week and average volumes increased 21% WoW to 525 million shares.
Remittances data for January 2025 showed strong inflows, totaling $3 billion. "This represents a remarkable 25% YoY growth," he said.
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