Karachi, March 15, 2025 – The Pakistan Stock Exchange (PSX) is projected to witness significant gains in the upcoming week, fueled by renewed investor confidence following a positive statement from the International Monetary Fund (IMF).
The IMF has expressed satisfaction with Pakistan’s progress in meeting the conditions of its ongoing loan program, boosting market sentiment.
Analysts at Arif Habib Limited anticipate a bullish trend in PSX as investors remain hopeful about positive developments in government and IMF negotiations. The benchmark KSE-100 index of PSX is currently trading at a price-to-earnings ratio (PER) of 6.3x for 2025, compared to its 10-year average of 8.0x, while offering a dividend yield of approximately 8.2% against a historical average of 6.5%.
The IMF and Pakistani authorities have made substantial progress towards reaching a Staff Level Agreement (SLA) under the 37-month Extended Arrangement of the Extended Fund Facility (EFF), as per an official statement issued on Saturday. The IMF acknowledged Pakistan’s strong program implementation and significant advancements in fiscal consolidation, inflation control, energy sector reforms, and structural economic policies. These developments are expected to further strengthen investor confidence in PSX.
At the start of the week, the decision to maintain interest rates at 12%—contrary to market expectations of a 50 basis points cut—negatively impacted PSX initially. However, by midweek, market sentiment turned positive on the anticipation of progress in resolving the energy circular debt. Additionally, the IMF’s decision to lower the Federal Board of Revenue’s (FBR) tax collection target contributed to improved investor confidence.
Another boost to PSX came from a 39% year-on-year surge in remittances by overseas Pakistanis, reaching $3.1 billion in February 2025—the highest since June 2024. Meanwhile, the State Bank of Pakistan (SBP) raised PKR 15.8 billion against a target of PKR 350 billion, with a minor dip in 10-year bond yields. Despite a $152 million weekly decline in SBP reserves, investor sentiment remained upbeat as the KSE-100 index closed at 115,536 points, reflecting a weekly gain of 1,137 points (+0.99%).
Sector-wise, positive contributions came from Exploration & Production (234 points), Oil Marketing Companies (194 points), Banks (179 points), Cement (118 points), and Fertilizer (110 points). Conversely, Engineering (-46 points), Glass & Ceramics (-45 points), Leather & Tanneries (-37 points), and Automobile Assemblers (-36 points) faced declines. Leading gainers included MARI (303 points), PSO (174 points), HBL (65 points), EFERT (53 points), and DGKC (51 points), while major laggards were MTL (-52 points), SRVI (-37 points), PPL (-34 points), HMB (-28 points), and ISL (-28 points).
Foreign selling continued, amounting to $2.61 million this week compared to last week’s $5.3 million. Major outflows were seen in Commercial Banks ($2.8 million) and Exploration & Production ($1.2 million). Meanwhile, local buying was driven by Banks/DFIs ($110.9 million) and Other Organizations ($1.7 million). Average daily trading volumes rose 16% week-on-week to 337 million shares, with the average traded value increasing by 21.1% to $79 million.
With the IMF’s continued support and favorable macroeconomic developments, analysts expect PSX to maintain its upward momentum in the coming week.