RECORDER REVIEW

KARACHI: Pakistan’s equity market ended the last week on a subdued yet stable note, with the KSE-100 Index largely holding its ground despite sharp fluctuations in macroeconomic indicators and a significant rise in trading activity.

The benchmark closed the week at 162,102.92 points, up slightly from 161,935.19 a week earlier, reflecting a nominal gain of 0.1 percent. The muted index performance came even as investor participation surged, suggesting a market in consolidation amid heavy turnover.

Market capitalization increased accordingly, rising to Rs18.51 trillion from Rs18.43 trillion, while the dollar-based valuation of the market edged up to US$65.97 billion, a 0.5 percent improvement over the previous week.

A substantial boost in activity defined the week. Average daily traded volume on the ready counter jumped 37.3 percent to 1.056 billion shares, sharply higher than last week’s 769.52 million. The value of shares traded also improved by 6.6 percent to Rs37.87 billion, or USD134.94 million.

The sideways market trajectory unfolded against a backdrop of mixed macroeconomic developments. Pakistan’s current account recorded a deficit of USD112 million in October 2025, bringing the cumulative 4MFY26 deficit to US$733 million. The primary pressure point remained the trade deficit, which expanded 39 percent year-on-year to US$12.7 billion during July–October 2025. Foreign direct investment also remained weak, declining 26 percent year-on-year to USD748 million over the same period, highlighting continued challenges on the external sector front.

Nevertheless, Pakistan’s sovereign dollar bond delivered a bright spot, rallying by 24.5 percent so far in 2025—one of the strongest performances in the region. The government is now planning a return to the global market with new dollar bonds next year after nearly five years of absence, buoyed by improved sentiment.

In another key development, Pakistan satisfied an important IMF condition as the Ministry of Finance released the Governance and Corruption Diagnostics Report ahead of the Fund’s Executive Board meeting that will decide on the release of a USD1.2 billion tranche.

On the fiscal side, central government debt declined by more than Rs1.2 trillion during the first quarter of FY26, settling at Rs76.6 trillion. Indicators from the real economy showed encouraging signals as well, with large-scale manufacturing output rising 2.69 percent year-on-year in September 2025.

Cumulative growth for the first quarter of the fiscal year reached 4.08 percent—the highest first-quarter expansion since FY23. Meanwhile, the State Bank of Pakistan’s foreign exchange reserves inched higher by US$27 million during the week to reach US$14.55 billion.

Sector performance at the Pakistan Stock Exchange reflected broad rotation. Refinery, power, fertilizer, exploration and production, and technology and communication stocks recorded gains over the week. In contrast, autos, banks, cement, textiles, pharmaceuticals, and select industrial sectors posted declines. The KSE-100 Index itself demonstrated minimal movement during the week, reinforcing the view that investors were largely positioning cautiously amid mixed cues.

Trading volumes remained heavily concentrated in select sectors. Technology and communication stocks dominated activity with a 22 percent share of weekly turnover. Banks and power stocks followed at 12 percent each, while engineering contributed 9 percent and investment banks accounted for 8 percent of total volume. The remaining sectors collectively formed 37 percent of the market’s trading activity.

Weekly performance among individual stocks also varied widely. Pioneer Cement emerged as the top gainer within the KSE-100 basket, surging 21.6 percent. K-Electric climbed 11.5 percent, followed by Pakistan Telecommunication Company at 7.3 percent, and Fauji Fertilizer Company rose 4.8 percent.

On the losing side, TPL REIT Fund I posted the sharpest weekly decline at 9.9 percent. BNWM dropped 8.3 percent, KTML fell 7.8 percent, FABL shed 6.3 percent, and PSEL dipped 6.0 percent. PABC also retreated by 5.2 percent, while ENGROH ended the week 4 percent lower.

Topline Securities in its commentary said that the week’s meagre gain can be accredited to the investors’ preference to remain on sidelines amid absence of any major news flow.