KARACHI: Extending the bullish spell for the ninth straight week, the KSE-100 index posted a solid gain of over 2 per cent, closing at 149,493 points, buoyed by strong buying interest and an influx of mutual fund investments. The positive momentum came despite political uncertainties and a volatile market environment.

During the week, foreign inflows into mutual funds stood at $55.5m, contributing significantly to the market’s upward movement. According to Topline Securities, the index was also supported by positive developments on the macroeconomic front, including a narrowing of Pakistan’s current account deficit to $254m in July, down from $348m in the same month last year.

Additionally, industrial growth remained positive, with IT exports rising 24pc year-on-year in July, reaching $354m, up from $286m in July 2024. The Large-Scale Manufactu­ring (LSM) index also grew by 4.1pc year-on-year in June.

The week saw strong participation in the government’s treasury bill (T-Bill) auction, where the government raised Rs492bn out of a total of Rs1,385bn in bids. Yields remained largely unchanged, though a slight decline of 2 basis points was observed in the 6-month tenor.

The currency market also saw positive movement, with the Pakistani rupee appreciating for the fifth consecutive week. It closed at Rs281.90 to a dollar, a marginal increase of 0.06pc from the previous week.

Index settles at 149,493 points after crossing 151,000 barrier mid-week on strong economic data

On the corporate front, the index was driven by strong earnings reports and a credit rating upgrade for Pakistani banks. Moody’s raised the deposit ratings for several banks, contributing 1,626 points to the index. The banking sector continued to benefit from these positive developments, with commercial banks seeing a surge in share prices.

However, the market sentiment weakened on Thursday after the apex court granted bail to former Prime Minister Imran Khan in the May 9 cases. This caused nervousness among investors fearing political instability, which led to some profit-taking. Despite this, the KSE-100 index hit a mid-week peak of 151,262 points before closing at 149,493 points, up by 3,001 points or 2.04pc on a week-on-week basis.

Sector performance was mixed. Among the top performers were REITs, leather & tanneries, and transport sectors, which gained 8.2pc, 8.0pc, and 7.3pc, respectively. Conversely, sectors such as Vanaspati & allied industries, close-end mutual funds, and chemicals saw declines, with losses of 4.2pc, 2.3pc, and 2.2pc, respectively.

Key stocks that contributed positively included Kohinoor Cement, The Searle Company, and Bank Al-Habib, with week-on-week gains of 17.7pc, 15.4pc, and 14.4pc, respectively. On the downside, Pak-Gulf Leasing Company and Packaged Limited saw notable declines of 8.7pc and 8.0pc, respectively.

Foreign investors and Banks/DFIs were net sellers, offloading $14.0m and $7.6m worth of stocks, while Mutual Funds and Companies absorbed the selling, with net purchases of $14.8m and $9.9m, respectively.

Looking ahead, market analysts from AKD Securities and Arif Habib Ltd (AHL) suggest that the KSE-100 index is likely to remain in a positive trend, driven by corporate earnings, particularly in the fertiliser, banking, and energy sectors. They also expect that the market will be influenced by developments surrounding circular debt and the results season, with a target of 165,215 points by December 2025. With the index currently trading at a forward price-to-earnings ratio (PER) of 7.45x for 2026, below its 10-year average, it remains an attractive investment option, offering a dividend yield of approximately 6.8pc.

On the economic front, the State Bank of Pakistan (SBP) reported an increase in foreign exchange reserves, which rose to $14.3bn by Aug 15, reflecting a modest weekly increase of $13m. Total reserves, including those held by commercial banks, amounted to $19.6bn, up by $74m week-on-week.While the market outlook remains positive in the near term, investors are advised to keep a close eye on the evolving political and macroeconomic landscape.

Published in Dawn, August 24th, 2025