KARACHI: After a bearish start, the Pakistan Stock Exchange (PSX) ended the outgoing short week at an all-time high, buoyed by a revival of buying interest in the final session.

The four-day trading week was shortened by the Quaid-i-Azam’s birthday holiday on Dec 25. Typically, rollover weeks are marked by selling pressure as investors adjust their portfolios amid changes in futures contracts.

This time, however, the PSX defied expectations, with a late surge propelling the KSE-100 index above 172,000 for the first time in its history, marking a remarkable rally.

The key development driving market momentum was the successful privatisation of Pakistan Inter­national Airlines (PIA), which concluded with the sale of a 75 per cent stake to a consortium led by the Arif Habib Group. The deal, valued at Rs135 billion ($480 million), is among the largest privatisation transactions in Pakistan’s history.

Despite initial volatility, index hit record 172,401 points on key economic developments

Topline Securities Ltd reported that the index rose 0.58 per cent week-on-week, driven largely by the PIA privatisation and the State Bank of Pakistan’s (SBP) 50bps cut in the policy rate to 10.5pc. The reduction in borrowing costs continued to spark investor interest, while strong demand in T-Bill auctions also added to market optimism.

At the treasury bills auction held this week, the government raised Rs883bn against a target of Rs600bn, with yields falling by 36 to 72bps across various tenors. Average daily trading volume during the week stood at 736m shares, while the total value traded was Rs31.5bn.

Despite overall market optimism, volatility persisted, prompting investors to make portfolio adjustments at year-end. AKD Securities noted the KSE-100 index closed the week up by 996 points, at a record 172,401 points.

The market also reacted positively to a number of other developments, including the successful disbursement of the third tranche under the Extended Fund Facility (EFF) and the Resilience and Stability Fund (RSF), which analysts say is likely to fuel further market optimism.

Foreign investors showed increased interest, particularly in light of improved relations between Pakistan and key international partners such as the United States and Saudi Arabia. On the currency front, the rupee appreciated slightly by 0.03pc against the US dollar, ending the week at Rs280.17 to a dollar.

Sector-wise, notable performers included property, technology, modaraba, paper and board, and fertiliser, all of which showed gains. Property sector stocks led the rally with a 11.3pc weekly increase. In contrast, sectors such as investment banks, woollen, weaving, and vanaspati saw declines, with some stocks losing up to 9.2pc during the week.

Among market participants, mutual funds were the major net buyers, accumulating $4.4m, while insurance companies were the primary sellers, offloading $5.0m worth of stocks.

The week also saw strong performances from individual stocks, with Javedan Corporation Ltd, Pakistan Telecommunication Company Ltd, Kohat Cement Company Ltd, Bank of Punjab, and Mehmood Textile Mills Ltd being among the top gainers. Conversely, stocks such as Yousaf Weaving Mills Ltd, Rafhan Maize Products Company Ltd, Unity Foods Ltd, Sui Southern Gas Company Ltd, and Gadoon Textile Mills Ltd recorded notable losses.

Looking ahead, analysts at AKD Securities expect the index’s momentum to persist, bolstered by factors such as monetary easing, improved investor sentiment, and an increasingly stable macroeconomic environment. Foreign portfolio flows are expected to rise, and the attractive valuations of local equities could continue to drive investor interest.

At present, the KSE-100 is trading at a multiple of 8.0x and offers a dividend yield of 6.5pc, which analysts say makes it an appealing choice for investors looking for value.

Published in Dawn, December 28th, 2025