Moaaz Manzoor

The benchmark KSE-100 Index of the Pakistan Stock Exchange (PSX) declined by 502 points, or 0.31 percent, on a week-on-week (WoW) basis to close at 163,304.13 by the end of last week, as investors engaged in profit-taking after recent gains while awaiting the upcoming monetary policy announcement and IMF Board review.

The index opened at 164,912, touched a high of 168,414, and dipped to 163,042 before stabilizing near the 163,000 mark — a sign of consolidation following several weeks of upward momentum. Trading activity slowed, with average volumes falling 18.8 percent WoW to 1.48 billion shares, while the average traded value decreased 10.6 percent to USD 177 million. K-Electric (KEL) led the volumes chart with 194.8 million shares traded.

Sector-wise, Exploration & Production (E&P) stocks contributed 404 points to the index’s strength, followed by Investment Banks (+184 points), Miscellaneous (+132), Leather & Tanneries (+79), and Fast-Moving Consumer Goods (+76). The main drags were Banks (-502), Power (-415), Cement (-338), Refinery (-76), and Automobile Assemblers (-57).

The macro backdrop remained broadly stable. Pakistan’s current account recorded a surplus of USD 110 million in September 2025, compared with deficits of USD 52 million in September 2024 and USD 325 million in August 2025. However, the first quarter of FY26 posted a deficit of USD 594 million, slightly higher than USD 502 million a year earlier.

The Real Effective Exchange Rate (REER) rose to 101.73 in September from 100.09 in August — up 1.64 percent month-on-month. Foreign Direct Investment (FDI) improved modestly to USD 186 million in September from USD 175 million in August, though inflows for 1QFY26 declined 34 percent year-on-year to USD 569 million. Profit and dividend repatriation increased 85.8 percent year-on-year to USD 751.7 million during the quarter, despite a 54.4 percent month-on-month decline to USD 159 million in September.

Oil and gas production dropped 6.9 percent and 3.1 percent WoW, respectively, while power generation in September grew 0.8 percent year-on-year to 12,592 gigawatt hours (GWh). The average cost of generation fell 15 percent year-on-year to PKR 7.09 per kilowatt hour (kWh), amid a 7.1 percent decline in Brent crude prices. The State Bank of Pakistan’s foreign exchange reserves edged up to USD 14.45 billion, while the rupee held steady at 281.02 per US dollar.

According to Arif Habib Limited (AHL), the KSE-100 Index is currently trading at a price-to-earnings ratio (PER) of 8.58x — almost matching its 15-year average of 8.59x — and offers a dividend yield of 5.5 percent versus the historical average of 6.1 percent. The brokerage expects the Monetary Policy Committee (MPC) to keep the policy rate unchanged at its meeting on October 27, adding that select scrips will remain in focus as the results season continues.

Ali Najib, Deputy Head of Trading at AHL, said the PSX extended its corrective phase as investors realigned portfolios ahead of the MPC meeting and rollover week. “The index remained under pressure despite active participation, with traded value reaching Rs 34.9 billion,” he noted.

AKD Securities projected a moderately positive medium-term outlook, supported by improved sovereign credit ratings, steady IMF engagement, and stronger ties with the United States and Saudi Arabia. The brokerage expects the KSE-100 to consolidate within the 160,000 – 165,000 range, identifying 160,000 as a strong technical support level for renewed buying interest.

Credit: INP-WealthPk