The Pakistan Stock Exchange (PSX) carried its bullish streak into August 2025, with the benchmark KSE-100 index touching a record high of 150,591 points before closing at 148,618, up 9,227 points month-on-month (MoM).
The rally was fuelled by strong institutional inflows, upbeat corporate results, and improving macroeconomic indicators, as Moody's upgraded Pakistan's sovereign rating to Caa1 on the back of fiscal consolidation, International Monetary Fund (IMF)-backed reforms, and strengthened external buffers.
On a day-on-day basis, the PSX started the week with a breather as the KSE-100 index floated in both directions and ultimately ended the session on a negative note at 148,815 (down 678 points; or 0.45%).
Next day, the market posted a decline of 380 points, or 0.26%. The session was marked by notable intra-day volatility, with the index hitting the intra-day high of 149,453, reflecting the futures rollover.
PSX struggled on Wednesday to find a footing and shed 941 points, slipping below the crucial 147,500 mark by settling at 147,494 as rollover week jitters combined with fresh flood warnings kept investors defensive.
The bourse wrapped up Thursday's session on a muted note, where the KSE-100 dipped 151 points to close at 147,344. On Friday, the PSX ended the final session of the month on a buoyant note, with the index surging 1,274 points to close at 148,618.
Arif Habib Limited (AHL) in its report noted that the KSE-100 index sustained its bullish momentum in August 2025, reaching the all-time high of 150,591 points, and closed at 148,618, posting a MoM gain of 9,227 points. The rally was underpinned by robust institutional and fund inflows, further supported by the ongoing corporate result season.
Moody's upgraded Pakistan's sovereign rating to Caa1 from Caa2, citing improving external buffers, fiscal consolidation, and reform progress under the IMF programme.
According to the Ministry of Finance, the overall fiscal deficit narrowed to Rs6.2 trillion (5.4% of GDP), improving from 6.8% in FY24. This progress was driven by robust growth in both tax and non-tax revenues, which outpaced the rise in expenditures, AHL said.
The current account deficit (CAD) narrowed to $254 million in Jul'25, reflecting a 37% year-on-year (YoY) decline from $348 million. Headline inflation for the month came in at 4.1% YoY compared to 3.2% in Jun'25.
In the MSCI index review for Aug'25, one stock (Faysal Bank) was added to the Frontier Markets Standard Index, while two stocks (Indus Dyeing and Manufacturing, and Jubilee General Insurance) were added and two removed (Habib Sugar Mills and Octopus Digital) from the Small Cap Index. In addition to this, AHL said, the total circular debt in the power sector as of Jun'25 declined to Rs1,614 billion.
Syed Danyal Hussain of JS Global said that the benchmark KSE-100 index remained range bound throughout the week, settling at 148,618 points, down 875 points, or 0.6% week-on-week (WoW).
Average daily turnover improved 14% WoW to 898 million shares, while foreign investors became net sellers during August, with an outflow of $43 million. It was largely offset by local buying, primarily from mutual funds.
During the week, he said, the Asian Development Bank approved a $800 million loan and guarantee programme for Pakistan to strengthen fiscal sustainability, while Islamabad also secured $649.5 million in foreign assistance during July, including bilateral and multilateral loans and grants, which reflected a 59% YoY increase.
In other news, the repatriation of profits and dividends stood at $244 million in Jul'25 (+75% YoY), largely led by the power sector. Meanwhile, the State Bank reported net dollar purchases of $7.8 billion from the currency market between June 2024 and May 2025, Hussain mentioned.
In the energy sector, the government decided to settle Rs100 billion worth of outstanding dues of Chinese independent power producers (IPPs) ahead of PM Shehbaz Sharif's visit to China.
Meanwhile, the State Bank halted proposals to legalise digital currencies, citing a lack of regulatory framework and Financial Action Task Force (FATF) concerns. Lastly, the central bank's reserves rose $18 million to $14.274 billion, the JS analyst added.
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ