Karachi, February 15, 2025 – The Pakistan Stock Exchange (PSX) is expected to maintain its positive momentum in the upcoming week, driven by anticipated strong corporate earnings, according to market analysts.
The outlook remains optimistic as the ongoing result season is likely to attract investor interest, particularly in stocks forecasted to deliver robust financial performance.
Experts at Arif Habib Limited suggest that the PSX is positioned for continued gains, as many scrips are currently trading at attractive valuations. The benchmark KSE-100 index of the PSX is trading at a Price-to-Earnings Ratio (PER) of 6.1x (2025), significantly below its 10-year average of 8.0x. Additionally, the market offers a dividend yield of approximately 8.3%, surpassing its 10-year average of 6.5%.
The market’s positive start this week follows Pakistan’s successful fulfillment of three out of five key fiscal conditions set by the International Monetary Fund (IMF) as part of its USD 7 billion program. Media reports highlight that this development has boosted investor confidence, contributing to the bullish sentiment at the PSX.
Moreover, MSCI’s recent adjustments to its global indices have further influenced the PSX. Pakistan’s weight in the FM Standard Index is expected to be around 5.89%, potentially attracting increased foreign investment. Meanwhile, the diplomatic front also brought positive news, with Turkey’s President visiting Pakistan and both nations reaffirming their commitment to expanding bilateral trade to USD 5 billion.
The auto sector showed impressive growth, with sales reaching 17,010 units, marking a 65% month-on-month increase. However, some macroeconomic concerns persist as State Bank of Pakistan’s (SBP) foreign exchange reserves dipped by USD 252 million, settling at USD 11.2 billion. Despite this, the Pakistani Rupee (PKR) appreciated slightly, closing at 279.21 against the USD, up 0.06% week-on-week.
The PSX closed the week at 112,085.29 points, gaining 1,762 points (+1.6% WoW). Sector-wise, Cement (975 points), Fertilizer (532 points), and Power Generation & Distribution (156 points) were the top contributors.
Foreign investors recorded USD 5.7 million in net selling compared to USD 9.9 million in the previous week, with Cement and Commercial Banks seeing the largest outflows. In contrast, local investors, particularly Banks/DFIs (USD 9.7 million), were net buyers. Average daily volumes surged to 525 million shares (up 20.8% WoW), while the average value traded increased by 28.5% to USD 97.6 million.
The PSX’s upward trend appears supported by positive corporate results, favorable macroeconomic developments, and increased investor activity, with the market poised to remain in positive territory in the days ahead.