Karachi, May 24, 2025 – The Pakistan Stock Exchange (PSX) witnessed subdued trading activity during the week ending May 23, 2025, as investor sentiment remained cautious due to growing uncertainty surrounding the upcoming fiscal year 2025-26 budget announcement, scheduled for June 10.
The benchmark KSE-100 index of the PSX posted a marginal decline of 0.45% week-on-week, reflecting the lack of investor interest. According to analysts at Topline Securities Limited, the market remained largely directionless throughout the week, with many investors opting to stay on the sidelines until clearer signals emerge regarding the government’s fiscal and economic strategies in the FY26 budget.
Key developments affecting the market during the week included the National Accounts Committee’s approval of the third-quarter GDP growth figure at 2.40%, while revising earlier first and second-quarter estimates to 1.37% and 1.53%, respectively. The revisions reflect a more conservative view of Pakistan’s economic performance.
Another significant development was the downward revision in National Savings Certificate rates, ranging from 10 to 100 basis points, which further discouraged aggressive participation in equity trading. Additionally, the country’s total liquid foreign exchange reserves received a boost, rising to $16.649 billion as of May 16, 2025, following the disbursement of the latest tranche from the International Monetary Fund (IMF), up from $15.614 billion recorded the previous week.
Despite this positive inflow, investor participation in the PSX remained weak. The average daily trading volume fell by 25% week-on-week to 492 million shares, while the average trading value plunged by 38% to PKR 23.8 billion.
Market participants appear to be adopting a wait-and-see approach amid speculation about new tax measures, possible changes in subsidies, and fiscal tightening—all of which could significantly impact corporate profitability and sectoral performance in the coming fiscal year.
Until there is more clarity on the FY26 budget, analysts expect trading at the PSX to remain muted. Market direction in the near term is likely to be dictated by budget-related developments and macroeconomic indicators. The PSX will need renewed investor confidence and policy clarity to regain upward momentum and spark more robust trading activity.