RECORDER REVIEW

KARACHI: Pakistan Stock Exchange extended its winning streak for a third consecutive week, with the benchmark KSE-100 Index surging by 4,348 points, or 3.1 percent, to close at an all-time high of 145,383.

The market even touched an intraday record of 146,813 points before mild profit-taking on Friday trimmed gains, as investors looked to secure profits ahead of the weekend. Activity remained vibrant, with average daily volumes on the ready board climbing to 653 million shares, up 16.3 percent from the prior week, and the traded value jumping by more than 30 percent to 165.5 million dollars.

BRIndex100 increased by 495.87 points last week, closing at 14,918.12 points. This is up from 14,422.25 points the previous week. On average, 508.247 million shares were traded daily for BRIndex100. BRIndex30 also rose by 1519.84 points over the week, ending at 42,334.27 points while it ended up previous week at 40,814.43 points. The average daily trading volume for BRIndex30 during the week remain 276.7 million shares.

Analysts say that the rally was underpinned by a confluence of macroeconomic improvements, supportive policy measures, and strong corporate earnings. They pointed to the decisive role of local institutional inflows and investor confidence in sustaining the uptrend. JS Global highlighted that sentiment received a boost after the United States imposed higher tariffs on Indian goods, a move seen as potentially benefiting Pakistan’s export-oriented sectors, especially textiles.

The brokerage also drew attention to the government’s progress on structural reforms, notably the reduction of the power sector’s circular debt by 780 billion rupees to 1.6 trillion rupees, alongside the unveiling of a five-year privatization roadmap that targets 24 state-owned entities, with Pakistan International Airlines among the ten companies slated for divestment in the first phase.

Analyst at Arif Habib Limited emphasized that the rally was also anchored in improving fiscal metrics, noting the Ministry of Finance’s report that the fiscal deficit had narrowed to 6.2 trillion rupees, or 5.4 percent of GDP, in FY25 from 6.8 percent a year earlier. This improvement was driven by robust growth in both tax and non-tax revenues that outpaced the rise in expenditures.

In the real economy, cement dispatches in July rose by 30.1 percent year-on-year on the back of strong exports and a post-Eid recovery in domestic demand, while petroleum sales increased by 2 percent thanks to lower retail prices compared to last year. Worker remittances reached a record 3.2 billion dollars in July, the highest ever for that month, further bolstering foreign exchange inflows even as the trade deficit widened sharply by 44 percent to 2.7 billion dollars due to higher imports.

Sectorally, banks were the star performers, adding 1,782 points to the index, followed by cement, fertilizer, exploration and production, and power. Negative drags came from a handful of sectors including miscellaneous, textile spinning, automobile parts, sugar, and leather and tanneries. HBL alone contributed 676 points to the benchmark’s rise, with UBL adding 369 points, OGDC 320 points, HUBC 283 points, and NBP 222 points. On the losing side, MARI shaved off 110 points, POL 73 points, FABL 59 points, PKGP 45 points, and LCI 36 points.

In terms of price performance, Unity Foods led the gainers with a 16.4 percent rise, followed by Nestle up 13.5 percent, BNWM 13.3 percent, HBL and PSX each 12.9 percent, YOUW 10.6 percent, and NBP 10.3 percent. PKGP was the biggest decliner, falling 6.1 percent, with FABL down 5 percent, LCI 4.2 percent, IBFL 3.7 percent, and POML and WAFI each losing 3.1 percent.

The pattern of investment flows revealed that foreign investors remained net sellers, divesting 10.87 million dollars’ worth of equities, primarily from exploration and production, food, and power sectors. Foreign corporates accounted for the bulk of this selling, while overseas Pakistanis managed a small net purchase of 0.84 million dollars.

Analysts agreed that the KSE-100 is attractively valued, that it is trading at a forward price-to-earnings multiple of 7.4 times for 2026 compared with a ten-year average of 8.0 times, and offering a dividend yield of around 7 percent, well above the historical average of 6.5 percent.

“The rally was fuelled by strong buying from local institutions and funds, along with the ongoing result season,” observed Analyst Jamil Ahmed, noting that corporate earnings momentum should continue to underpin sentiment in the weeks ahead. JS Global described the government’s progress on the energy sector and privatization roadmap as “important confidence-building measures” that, alongside macro improvements, have created a favourable backdrop for equities.

With corporate results still to come from several heavyweights and potential updates on energy sector reforms, market watchers expect the positive tone to persist into the coming, shorter trading week. Whether the index can build on its recent highs will depend on the interplay of earnings surprises, reform progress, and the broader macroeconomic narrative — but for now, the bulls remain firmly in control.