RECORDER REVIEW
KARACHI: Pakistan’s equity market remained subdued during the outgoing week as the benchmark KSE-100 Index slipped 875 points or 0.6 percent to settle at 148,618 points, amid persistent foreign selling, muted sectoral performance, and cautious investor sentiment. In parallel, fertilizer offtakes posted their first meaningful rebound of the calendar year, offering a glimmer of optimism for the agriculture sector and input industries.
BRIndex100 closed the week at 15,080.43 points which was 25.13 points lower than the previous week with an average daily turnover of 727.327 million shares. However, BRIndex30 closed 43,9327.06 points which was 882.7 points higher than the previous week close. While the average daily turnover remains 421.649 million shares.
Market stayed range bound despite a 14 percent improvement in average daily trading volumes, which rose to 898 million shares compared to 790 million a week earlier. While local institutions, particularly mutual funds, provided support, foreign investors were consistent net sellers in August, pulling out USD43 million from equities.
During the week market capitalisation declined by Rs80 billion to Rs17.65 trillion, equivalent to USD62.66 billion, reflecting a 0.5 percent weekly erosion.
“The market is consolidating at elevated levels and is finding support from resilient domestic liquidity,” said Sherayr Butt, analyst at Darson Securities. “Despite foreign outflows, positive macro triggers such as ADB’s USD800 million loan and improved foreign assistance inflows helped sentiment remain stable.”
Sectoral performance on the PSX reflected uneven investor interest. Cement was the best-performing sector, gaining 3.9 percent amid strong construction activity, followed by engineering (2.3 percent) and power (+2 percent). Food, autos and refineries posted marginal gains, while fertilizers, technology, banks, and pharmaceuticals dragged the index lower.
Among individual equities, PIBTL surged 10.9 percent to close at Rs12.79, followed by SAZEW with 10.7 percent and DG Khan Cement up by 9.1 percent. On the downside, AGP tumbled 9 percent, Bank AL Habib 8.5 percent, and FABL 8 percent.
Meanwhile, in a parallel development that could influence agri-input stocks, fertilizer offtakes showed the first turnaround of 2025. The urea sales jumped 56 percent year-on-year in May to 418,000 tons, while DAP, CAN, and NP sales rose modestly by 2–5 percent.
The recovery was driven by demand under the Punjab Kisan Card interest-free loan scheme and pre-emptive purchases amid expectations of post-budget price hikes. Nevertheless, analysts noted that sector continues to grapple with high inventory levels and broader agricultural stress, which could weigh on sustainability.
Company-wise performance was mixed. EFERT’s urea sales rose 86 percent year-on-year, FATIMA posted a 74 percent jump, while Fauji Fertilizer Company (FFC) recorded a steep 28 percent drop in sales. Experts cautioned that broader risks remain tied to delayed Kharif sowing, farmer indebtedness, and muted crop outlook.
Despite volatility, analysts struck an optimistic note. They reiterated their overweight stance on fertilizers, with FFC and ENGRO favoured for stable earnings and dividend payouts. JS Global emphasized that domestic institutional buying, coupled with improving foreign assistance, should provide near-term stability.
The week’s macroeconomic backdrop was significant. Pakistan secured USD649.53 million in foreign assistance during July 2025, up 59 percent year-on-year, largely through bilateral and multilateral loans and grants. The State Bank of Pakistan (SBP) confirmed net dollar purchases of USF7.8 billion between June 2024 and May 2025, while reserves improved slightly by USD18 million to $14.27 billion. Repatriation of profits and dividends surged to $244 million in July, a 75 percent annual jump, led by the power sector.
The government also announced settlement of Rs100 billion in dues to Chinese IPPs ahead of the Prime Minister’s visit to Beijing, while the SBP halted proposals to legalize digital currencies, citing regulatory gaps and FATF concerns.
As the PSX consolidates near record levels and the agriculture sector shows tentative signs of demand recovery, market watchers say investors will be closely monitoring government reforms, external financing commitments, and upcoming harvest trends to gauge direction in the months ahead.
