Record remittances, stable rupee and easing fuel prices support market sentiment despite geopolitical uncertainties.
KARACHI: The benchmark KSE-100 Index of the Pakistan Stock Exchange (PSX) posted a weekly gain of 1.13 per cent, rising 1,921 points to close at 172,400 points, as investors remained cautious ahead of the federal budget announcement while monitoring developments in US-Iran nuclear negotiations.
According to a research report issued by Arif Habib Limited, market activity remained measured during the week as participants awaited clarity on fiscal measures and economic policies outlined in the Federal Budget 2026-27.
The report highlighted encouraging developments across several economic indicators. Auto sales, including cars, light commercial vehicles (LCVs), vans, jeeps and electric vehicles (EVs), increased 19 per cent year-on-year to 17,600 units in May 2026. Cumulative sales during the first eleven months of FY2025-26 surged 45 per cent to 183,600 units, although monthly volumes declined 20 per cent due to reduced economic activity during Eid holidays.
Meanwhile, workers’ remittances reached a record monthly high of $4.3 billion in May 2026, registering a 15 per cent annual increase and a 20 per cent rise compared with April 2026. Total remittances during 11MFY26 climbed 9 per cent to $38.1 billion, providing vital support to Pakistan’s external account position.
The report noted that central government debt rose 1.7 per cent month-on-month to Rs81.9 trillion in April 2026, compared with Rs74.9 trillion recorded during the same month last year, reflecting an annual increase of 9.3 per cent.
In the latest Treasury Bill auction held on June 10, the government raised Rs1.96 trillion against a target of Rs2 trillion. Cut-off yields declined by 4.1 basis points on one-month papers and 1 basis point on six-month instruments, while yields on three-month and 12-month tenors increased marginally.
Petroleum pricing trends remained mixed during the week. The price of Motor Spirit (petrol) declined by Rs4 per litre to Rs377.78 per litre, primarily due to a reduction in ex-refinery prices despite an increase in the petroleum levy. In contrast, High-Speed Diesel (HSD) prices remained unchanged at Rs380.78 per litre.
The energy sector witnessed lower production levels, with gas output declining 1.6 per cent week-on-week to 3,021 million cubic feet per day (mmcfd) during the first week of June 2026. The decline was attributed to lower production from key fields, including Qadirpur, Kandhkot, Sui and Shewa, partly due to disruptions caused by an SNGPL pipeline rupture.
Similarly, oil production fell 1 per cent to 68,821 barrels of oil per day (bopd), reflecting lower output from fields such as Makori East, Maramzai, KPD and Sharf.
The report also showed continued growth in Roshan Digital Account (RDA) inflows, which reached $13.06 billion by the end of May 2026. Of this amount, $2.07 billion had been repatriated, while $8.28 billion had been utilised domestically, leaving a net repatriable liability of $2.71 billion.
Pakistan’s liquid foreign exchange reserves increased by $35.7 million week-on-week to $22.7 billion, supported by a $24.8 million rise in State Bank of Pakistan reserves, which stood at $17.2 billion. The country’s import cover improved to 2.76 months.
The Pakistani rupee remained largely stable against the US dollar, closing the week at Rs278.32 per dollar, compared with Rs278.41 a week earlier.
Looking ahead, Arif Habib Limited stated that the Federal Budget 2026-27, the State Bank of Pakistan’s monetary policy decision scheduled for June 15, and developments surrounding US-Iran negotiations would remain the primary drivers of market sentiment.
The brokerage noted that the KSE-100 Index is currently trading at a price-to-earnings ratio of 8.0 times, offering an attractive dividend yield of approximately 6.3 per cent, which could continue to support investor interest in Pakistani equities.
