Karachi, February 22, 2025 – Investors at the Pakistan Stock Exchange (PSX) are closely monitoring developments related to upcoming meetings between government authorities and the International Monetary Fund (IMF).
The outcome of these discussions is expected to play a crucial role in shaping market sentiment in the coming days.
Analysts at Arif Habib Limited have forecasted that the PSX is likely to maintain a positive trajectory in the upcoming week. Investors are particularly keen on the IMF mission’s visit, which will review Pakistan’s financial situation, discuss climate financing, and assess the economic measures undertaken by the government. This crucial engagement could drive market performance and determine the direction of investor confidence.
The ongoing earnings season is also expected to influence market trends, with select stocks drawing investor interest due to strong financial results. The benchmark KSE-100 index of the PSX is currently trading at a price-to-earnings ratio (PER) of 6.2x (2025), lower than its 10-year average of 8.0x, while offering an attractive dividend yield of approximately 8.2%, compared to its 10-year average of 6.5%.
The market opened on a negative note this week, extending last week’s losing streak. However, positive momentum soon returned following the World Bank’s commitment to invest USD 40 billion in Pakistan. Additionally, the anticipated IMF discussions regarding USD 1 billion in climate financing further bolstered market sentiment.
On the economic front, Pakistan’s current account balance posted a deficit of USD 420 million in January 2025, breaking a three-month streak of consecutive surpluses. The recent Treasury Bill (T-Bill) auction saw cut-off yields rise by 2 basis points (3M), 17 basis points (6M), and 6 basis points (12M). Meanwhile, power generation in January 2025 decreased by 1.9% year-on-year. The State Bank of Pakistan’s foreign exchange reserves saw a modest increase of USD 35 million, reaching USD 11.2 billion. Despite these fluctuations, the PSX KSE-100 index closed at 112,801 points, gaining 716 points (+0.64% WoW).
Sector-wise, positive contributions came from Cement (549 points), Fertilizer (309 points), Automobile Assemblers (81 points), Leather & Tanneries (65 points), and Glass & Ceramics (52 points). However, Commercial Banks (-198 points), Exploration & Production (-169 points), Pharmaceuticals (-155 points), and Technology & Communication (-55 points) weighed down the index.
Scrip-wise, major gainers included FFC (167 points), LUCK (160 points), FCCL (153 points), EFERT (119 points), and MTL (96 points). On the other hand, major decliners included UBL (-216 points), MARI (-136 points), ABOT (-130 points), MCB (-84 points), and HBL (-82 points).
Foreign investors continued to offload equities, recording net selling of USD 5.1 million compared to USD 7.1 million last week. The heaviest foreign outflows were in Cement (USD 2.7 million) and Commercial Banks (USD 1.4 million). On the local front, buying activity was dominated by Insurance Companies (USD 5.8 million) and Individual Investors (USD 4.4 million). Trading volumes averaged 593 million shares (up 13% WoW), while the average value traded stood at USD 86 million (down 12% WoW).
With the PSX reacting to key economic developments, investor focus remains on the IMF meeting outcome, earnings reports, and global market cues to determine the next market movement.