Karachi, August 30, 2025 – The ongoing flood situation across several parts of Pakistan is expected to weigh on investor confidence at the Pakistan Stock Exchange (PSX) in the coming week. Analysts warn that prolonged rainfall and the possibility of further flood damage could affect key economic sectors, influencing trading activity.
Despite this, the ongoing corporate results season is keeping certain scrips in focus. Market experts believe company earnings announcements may provide short-term support, but the uncertain situation surrounding infrastructure damage and supply chain disruptions caused by floods could create volatility.
The benchmark KSE-100 Index ended the week at 148,618 points, down 875 points or 0.6% week-on-week (WoW). Profit-taking was a key driver of the decline, though selective buying helped limit deeper losses. The index is currently trading at a forward Price-to-Earnings Ratio (PER) of 7.90x for 2026, compared to its 10-year average of 8.59x. Additionally, dividend yield remains attractive at 6.8%, slightly above the historical average of 6.13%.
Key developments during the week included Pakistan’s decision to clear over PKR 100 billion in dues to Chinese power plants, reducing CPEC-related liabilities to just over PKR 300 billion. Auto financing surged by 25.3% YoY to PKR 286 billion in July 2025, while the National Electric Vehicle (NEV) Policy 2025–30 was unveiled to tackle the climate crisis.
Foreign exchange reserves rose to USD 19.6 billion, with SBP reserves at USD 14.3 billion, providing import cover of 2.3 months. Meanwhile, the PKR appreciated slightly by 0.05% WoW to close at 281.77 against the USD.
Outlook
Market direction will depend on the evolving flood situation, corporate earnings, and economic data. Any worsening of the situation may dampen investor sentiment further, while policy support could offer relief.