Strong corporate earnings, lower inflation, IMF support, and growing Sukuk activity drive Pakistan’s stock market growth despite regional uncertainties.
ISLAMABAD: Pakistan’s equity market showcased remarkable resilience during the July-March FY2026 period, with the benchmark KSE-100 index surging by 18.4 percent.
Despite the Middle East crisis, the market outperformed several major global counterparts. This bullish trend was fueled by robust corporate earnings, declining inflation, a reduced policy rate, and the successful execution of the IMF Extended Fund Facility (EFF) program, which restored macroeconomic stability and investor trust.
Surging Market Capitalization
According to official data, the Pakistan Stock Exchange (PSX) witnessed a significant expansion in value. The market capitalization, which stood at Rs 15,237 billion ($53 billion) on June 30, 2025, climbed to Rs 16,534 billion ($59.23 billion) by March 31, 2026.
This marks a solid 8.5 percent increase, adding Rs 1,297.5 billion to the equity market during the reviewed period.
Sovereign Debt and Capital Inflows
The modernization of government debt infrastructure has yielded strong results. Following the initiation of primary market auctions through capital market institutions, the government successfully conducted 32 Government Debt Securities (GDS) auctions, raising Rs 5.099 trillion by March 2026.
These included various sovereign Sukuk instruments (discounted, fixed, and variable rates) now actively traded on the PSX. Additionally, the National Savings Schemes attracted a net inflow of Rs 226.69 billion during the period.
Booming Islamic Finance Sector
Shariah-compliant financial instruments saw unprecedented traction. Under the Shariah Governance Regulations 2023, the Securities and Exchange Commission of Pakistan (SECP) issued 53 corporate certificates totaling Rs 229.6 billion.
The sovereign Sukuk sector recorded massive issuances worth Rs 1.86 trillion, while secondary market trading for these instruments crossed Rs 1.38 trillion.
As of March 31, 2026, Shariah-compliant securities dominated the secondary market, making up 57.5 percent (308 out of 536) of all listed equities. This represents a staggering Rs 10.6 trillion, or 64 percent, of the total PSX market capitalization, underscoring the deep maturity of Islamic finance in Pakistan.
