Pakistan’s benchmark stock index declines 0.6% week-on-week to 167,089 points as geopolitical uncertainty offsets optimism over the IMF agreement and expected disbursements.

KARACHI: The benchmark KSE-100 Index of the Pakistan Stock Exchange (PSX) shed 1,066 points during the week ended October 9, 2026, as persistent geopolitical uncertainties partly offset positive investor sentiment following Pakistan’s staff-level agreement with the International Monetary Fund (IMF).

According to a weekly research report by Arif Habib Limited, the benchmark index declined 0.6% week-on-week to close at 167,089 points.

Pakistan and the IMF reached a staff-level agreement on the fourth review under the Extended Fund Facility (EFF) and the third review under the Resilience and Sustainability Facility (RSF). The agreements have paved the way for potential disbursements of $1 billion and $210 million, respectively, subject to approval by the IMF Executive Board.

The expected payments would bring total disbursements under the two programmes to approximately $5.7 billion.

Economic and market developments

The research report highlighted several developments affecting Pakistan’s economy and listed companies during the week.

Central government debt declined 0.5% month-on-month to Rs82.95 billion in August 2026, although it remained 7.1% higher than the level recorded in August 2025.

In the latest Pakistan Investment Bond (PIB) auction, the government raised Rs381 billion against a target of Rs350 billion. Of the total amount, Rs208.4 billion was allocated to three-year bonds. Yields increased by 26 to 41 basis points across the three-, five- and 10-year tenors, while the two-year yield fell by 19 basis points. Bids for 15-year bonds were rejected.

Pakistan’s cement industry recorded improved dispatches. Total dispatches rose 6% year-on-year to 4.62 million tonnes in September 2026, supported by a 7% increase in domestic sales, while exports remained flat.

During the first quarter of FY2027, cement dispatches increased 4% year-on-year to 13.14 million tonnes. Local sales grew 8%, offsetting part of the impact of an 11% decline in exports.

In the energy sector, Sindh Engro Coal Mining Company (SECMC) is expanding its Thar Block-II coal mine to supply additional coal to Lucky Electric Power Company Limited (LEPCL). The expansion is expected to enable the power producer to transition fully to locally sourced Thar coal, reduce dependence on imported fuel and support foreign exchange savings and energy security.

Automobile sales present a mixed picture

Sazgar Engineering Works Limited (SAZEW) reported flat year-on-year four-wheeler sales of 2,474 units during August and September 2026. Its first-quarter FY2027 four-wheeler sales fell 12% year-on-year to 3,137 units, primarily due to weak sales in July.

However, three-wheeler sales increased 32% year-on-year to 5,173 units during August and September. First-quarter three-wheeler sales rose 45%, contributing to overall sales growth of 22% to 10,872 units.

Oil and currency markets

Oil production declined 6.4% week-on-week to 63,700 barrels per day, mainly because of lower output from northern fields. Gas production fell 1.4% to 2,999 million cubic feet per day, reflecting reduced production from Mari, Sui and Sharf.

Petroleum prices moved in opposite directions during the week. Motor spirit (MS) prices increased 2.1% to Rs398.96 per litre, while high-speed diesel (HSD) prices declined 0.9% to Rs395.72 per litre.

The Pakistani rupee appreciated marginally by 0.03%, closing at Rs277.00 against the US dollar.

Outlook and recommendations

Arif Habib Limited expects the stock market to remain sensitive to geopolitical developments in the near term. Corporate earnings announcements for the September quarter are also expected to act as a key catalyst for investor sentiment.

The KSE-100 Index is currently trading at a price-to-earnings ratio of 7.5 times, offering a dividend yield of 6.7%, according to the brokerage’s report.

Market direction in the coming weeks is likely to depend on developments surrounding the IMF programme, geopolitical conditions and the strength of corporate earnings.