Moaaz Manzoor

The Pakistan Stock Exchange (PSX) sustained its upward momentum in August 2025, with the KSE-100 Index gaining 9,227 points to close at 148,618, after briefly touching an all-time high of 150,591 during the month.

The robust rally was fuelled by strong institutional and fund inflows, solid corporate earnings, and a steady improvement in market fundamentals. Moody’s upgraded Pakistan’s sovereign rating to Caa1 from Caa2, citing progress in fiscal consolidation and reforms under the IMF program. The Ministry of Finance reported the fiscal deficit narrowed to PKR 6.2 trillion (5.4% of GDP) in FY25 from 6.8% in FY24, while the Current Account Deficit fell to USD 254 million in July 2025, down 37% from last year.

On the production side, cement dispatches jumped 30.1% in July; petroleum sales rose 2% year-on-year; and technology exports hit a record USD 354 million. Auto sales declined 49% month-on-month to 11,000 units but were up 28% compared to last year, while auto financing rose 25.3% year-on-year to PKR 286 billion.

Trading activity stayed firm during the month. The average trading volume slipped 4% to 737 million shares, but the trading value surged 20% to USD 150 million. Sector-wise, trading volumes were led by banks, technology, food, investment banks, and cement, while value-wise activity was dominated by E&Ps, banks, cement, OMCs, and pharmaceuticals. Among individual scrips, BOP, WTL, PIBTL, KOSM, and KEL emerged as the most actively traded.

Sectoral contributions to the index showed strength from banks (3,757 points), cement (2,547 points), E&Ps (939 points), power (476 points), and autos (309 points). Fertilizers, chemicals, and textiles registered mild declines. Leading individual contributors were LUCK, HBL, OGDC, BAHL, and MEBL, while FFC, PKGP, and LCI dragged the index lower.

Foreign investors sold shares worth USD 43.1 million in August, mainly in E&Ps and OMCs, but local investors stepped in to absorb the pressure. Funds, individuals, and companies reported net buying worth USD 34.1 million, USD 20.4 million, and USD 20.1 million, respectively.

Analysts believe September will be eventful with the IMF’s second review, the State Bank’s monetary policy decision on Sept 15, and the continuation of the earnings season. Arif Habib Limited has projected inflation to ease slightly to 3.84% in August from 4.06% in July, though core inflation remains sticky.

Speaking with Wealth Pakistan, Syed Zafar Abbas, Manager at Zahid Latif Khan Securities, added that August began on a slower note due to June-end results, but said, “as results are turning out positive, the market is rising… hope for the best.”

Muhammad Waqas Ghani, Head of Equity Research at JS Global Capital, said the KSE-100’s 7% August gain reflected stable macros, IMF-backed reforms, strong earnings, and positive U.S. cues, noting a 29% return in 8MCY25 with cement stocks leading the rally.

Credit: INP-WealthPk