AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Karachi: The stock market experienced notable volatility this week, influenced by geopolitical tensions and economic developments. Despite an initial decline due to border tensions with Afghanistan, the market rebounded sharply by 4,900 points in the final session, ending the week at 161,632 points, a 1% decrease overall. The market’s recovery was bolstered by news of a potential ceasefire between Pakistan and Afghanistan.
Average daily traded volumes fell by 14.7% to 1,564 million shares, as investor caution prevailed during the roll-over week. A significant development was the State Bank of Pakistan’s decision to maintain the policy rate at 11%, aligning with market expectations.
On the diplomatic front, Pakistan-Afghanistan talks in Istanbul concluded with an agreement on a truce, which helped ease geopolitical tensions. In response to fiscal challenges, authorities assured the International Monetary Fund of an additional 200 billion Pakistani Rupees in revenue measures if first-half fiscal year 2026 tax targets are not met.
Meanwhile, the State Bank of Pakistan raised 1 trillion Pakistani Rupees in a T-bill auction, with yields on 1-month paper decreasing by 11 basis points, while 12-month tenor yields increased by 10 basis points. On the external side, foreign exchange reserves saw a marginal decline of 16 million USD to 14.5 billion USD as of October 24th, but the central bank has increased its forecast for reserves to reach 17.8 billion USD by June 2026.
Looking ahead, analysts at AKD Securities Limited foresee momentum in the KSE-100 index continuing. The outlook is bolstered by the successful staff-level agreement of the IMF’s second review, minimal flood impact, and improved credit ratings. Investor sentiment is expected to improve further with potential foreign investment inflows, driven by better relations with the United States and Saudi Arabia.
The analysts highlight the lack of alternative investment options and the attractive valuation of local equities, with the KSE-100 trading at a multiple of 7.4x and offering a 6.6% dividend yield. Top stock picks include MEBL, MCB, HBL, OGDC, PPL, PSO, FFC, ENGROH, LUCK, DGKC, FCCL, SYS, and INDU.