The Pakistan Stock Exchange (PSX) extended its bullish streak for the ninth consecutive week, with the benchmark KSE-100 index climbing 2.04% to settle at 149,493 points, boosted by mutual fund inflows and encouraging economic indicators. The index briefly crossed the 151,000 level mid-week before profit-taking set in.
Foreign inflows into mutual funds totaled $55.5 million during the week, driving market momentum, according to Topline Securities. On the macroeconomic side, Pakistan’s current account deficit narrowed to $254 million in July, down from $348 million last year, while IT exports surged 24% year-on-year to $354 million. The Large-Scale Manufacturing (LSM) index also posted a 4.1% annual growth rate in June.
The government’s treasury bill auction saw robust investor participation, with Rs492 billion raised out of Rs1,385 billion in bids. Meanwhile, the Pakistani rupee appreciated for a fifth straight week, closing at Rs281.90 against the US dollar.
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Strong corporate earnings and Moody’s credit rating upgrade for Pakistani banks added to the positive momentum, with the banking sector contributing 1,626 points to the index. Top weekly performers included Kohinoor Cement (+17.7%), The Searle Company (+15.4%), and Bank Al-Habib (+14.4%).
Sector-wise, REITs (+8.2%), leather & tanneries (+8.0%), and transport (+7.3%) outperformed, while vanaspati (-4.2%), close-end mutual funds (-2.3%), and chemicals (-2.2%) lagged behind. On the downside, Pak-Gulf Leasing (-8.7%) and Packaged Limited (-8.0%) faced notable losses.
Despite the strong rally, investor sentiment weakened on Thursday after the Supreme Court granted bail to former Prime Minister Imran Khan in May 9 cases, triggering political concerns and some profit-taking.
Foreign investors and Banks/DFIs were net sellers, offloading $14 million and $7.6 million worth of shares, while Mutual Funds and Companies absorbed the selling with net purchases of $14.8 million and $9.9 million, respectively.
Looking ahead, analysts at AKD Securities and Arif Habib Ltd expect the KSE-100 to sustain its upward trend, backed by robust corporate earnings in fertiliser, banking, and energy sectors. With the index currently trading at a forward PER of 7.45x—below its 10-year average—it remains attractive for investors, offering an estimated dividend yield of 6.8%.
The State Bank of Pakistan (SBP) also reported an uptick in foreign exchange reserves, which stood at $14.3 billion as of August 15, reflecting a weekly rise of $13 million. Total reserves, including those held by commercial banks, increased to $19.6 billion.
Market watchers caution, however, that political developments and macroeconomic shifts will continue to influence investor sentiment in the weeks ahead.
