The Pakistan Stock Exchange (PSX) rallied 4,298 points (+3.2% week-on-week) and closed at 138,597, driven by broad-based buying and positive macro developments.
The current account recorded a $2.1 billion surplus in FY25, the highest in 22 years, aided by strong remittances. The State Bank of Pakistan's (SBP) foreign currency reserves rose to $14.5 billion, while the Pakistani rupee slipped slightly to 284.87 against the dollar.
Gains at the PSX were led by Fauji Fertiliser Company (FFC) and United Bank Limited (UBL) as sentiment improved following Pakistan's engagement with Moody's and the unveiling of a new tariff policy.
Sector-specific highlights included a 20% year-on-year (YoY) jump in auto financing and a 2.3% rise in large-scale manufacturing (LSM) output in May. With the market trading at attractive valuations and earnings season underway, investors remain upbeat.
On a day-on-day basis, the PSX continued its northbound journey on Monday, with the benchmark KSE-100 index surging 2,203 points to close at an all-time high of 136,502, buoyed by the IMF resident representative's upbeat comments that termed Pakistan's economic recovery "strong so far."
However, the market witnessed a day of consolidation on Tuesday, when the index oscillated frequently before closing at 135,940, down 563 points. The consolidation continued on Wednesday as the KSE-100 ended the session at 136,380, up 440 points, after fluctuating in both directions.
Bulls returned on Thursday with strength as the bourse surged 2,285 points, driven by robust institutional inflows and investor optimism. Fertiliser stocks led the rally.
The PSX ended the week on a volatile note on Friday, with the index briefly crossing the 140,000 mark before slipping to intra-day low of 138,344 (down 322 points). However, it managed to recover and closed almost flat at 138,597, losing just 68 points.
Arif Habib Limited (AHL) noted that despite some profit-taking during the week, the market maintained its upward momentum, during which the index climbed from 134,299.8 to 138,597.4. This translated into a strong weekly gain of 4,298 points, or 3.2%. The rally was fueled by broad-based buying across sectors, supported by stabilising macroeconomic indicators.
Among the key developments, AHL said, Pakistan's economic team met with Moody's to highlight the improving fundamentals and reaffirm the country's commitment to fiscal reforms. The government also unveiled the National Tariff Policy 2025-30, aimed at rationalising tariffs and enhancing export competitiveness.
In sector-specific updates, auto financing increased 20% YoY to Rs277 billion in June 2025, up from Rs231 billion in June 2024. On a month-on-month (MoM) basis, it rose 2%. The LSM index grew 2.3% YoY during May 2025 and surged 7.9% MoM. During 11MFY25, the LSM output decreased 1.2% YoY.
Pakistan's current account surplus reached $2.106 billion in FY25, an improvement from the deficit of $2.072 billion during the same period of last year. This marks the highest surplus in 22 years.
Meanwhile, the SBP's foreign exchange reserves rose $23 million to $14.5 billion — the highest since March 18, 2022. Pakistani rupee weakened 41 paisa WoW to 284.87 against the dollar, AHL added.
JS Global observed that the KSE-100 index extended its bullish run during the outgoing week, gaining 4,298 points, or 3.2% WoW, to close at 138,597. However, average daily turnover declined 20%.
The significant surge in the index was primarily driven by FFC (+1,821 points) and UBL (+1,165 points). Sentiment remained positive as the IMF expressed satisfaction with Pakistan's economic progress and structural reform efforts, JS said.
Among major news, Pakistan has to repay $23 billion in external debt in the current fiscal year, of which some of the debt is expected to be rolled over by friendly countries. Additionally, the government aims to finalise the privatisation of PIA within two to three months, while Expressions of Interest (EOIs) for Roosevelt Hotel, New York will be invited in August.
In the latest Pakistan Investment Bonds (PIBs) auction, Rs342 billion was raised against the target of Rs300 billion, with yields dropping 30-54 basis points across different tenors, JS added in its report.
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