KARACHI: The outlook for next week appears constructive, with AKD Research expecting the KSE-100 to extend its positive momentum on the back of the successful IMF Executive Board approval of the second review and improved global credit ratings.
Falling fixed income yields, limited alternative investment avenues and attractive valuations, with the index trading at 7.6x earnings and offering a 6.8 per cent dividend yield, should keep investor interest alive.
Expectations of fresh foreign portfolio and direct investment, supported by improving ties with the US and Saudi Arabia, add further upside potential. That said, geopolitical noise and macro data surprises may still inject bouts of caution.
The market spent most of the week navigating volatility as sentiment swung between optimism around IMF progress and worries over the continuing deadlock between Pakistan and Afghanistan on peace talks.
The IMF’s Governance and Corruption Diagnostic Assessment, which highlighted pervasive corruption, also added pressure. Still, the benchmark KSE-100 managed to inch up by 167 points, or 0.1 per cent week-on-week, to close at 162,103 points. Volumes improved sharply, with average daily turnover rising 35.7 per cent to 1.3 billion shares compared to 0.9 billion shares a week earlier.
On the macro front, the current account posted a deficit of $112 million in October 2025, versus a surplus of $296 million in the same period last year. IT exports delivered a bright spot, hitting a historic monthly high of $386 million, up 17 per cent year-on-year (YoY).
SBP reserves increased by $27 million to reach $14.6 billion, while the rupee appreciated slightly by 0.04 per cent to close at 280.62 per US dollar.
Key news during the week included the finance minister confirming Saudi Arabia’s $10 billion interest in Pakistani projects, the signing of a Pakistan-US agreement on critical mineral exploration, and progress on PSO’s expected LNG cargo diversion deal with Qatar.
Meanwhile, the government prepared to reopen IMF talks on refinery upgrades and Barrick signalled the possibility of restructuring its Reko Diq stake.
Sector performance remained uneven. Glass and ceramics, synthetic and rayon, refinery, modarabas and power gained between 3.8 and 6.9 per cent. In contrast, woollen, miscellaneous, textile composite, REITs and cement fell between 1.6 per cent and 8.3 per cent. Individuals and Banks/DFIs emerged as major buyers with net purchases of $5.5 million and $4.4 million, while foreigners and other organisations sold $5.7 million and $4.9 million.
Analyst Ali Najib at Arif Habib Ltd noted that the market largely stayed range-bound, with the KSE-100 opening at 163,078 points, hitting a high of 163,818 and a low of 160,584 before settling at 162,103 amid profit-taking and pre roll-over positioning.
Nabeel Haroon at Topline Securities attributed the flat close to investors choosing to remain cautious due to the absence of major triggers. He highlighted October’s US$112 million current account deficit, $179 million in FDI and improvement in the REER to 103.95.
Wadee Zaman at JS Research said the market moved sideways but benefited from a 37 per cent rise in average daily traded volume. He pointed to the widening 4MFY26 trade deficit, lower FDI, Pakistan’s strong dollar bond rally and progress on IMF conditions as the key macro drivers shaping sentiment.
Overall, the market closed steady, but expectations for a stronger week ahead remain intact.
