Surge persists at PSX due to optimism in cement sector
Pakistan's Stock Market Soars to New Heights
Pakistan's stock market, as measured by the KSE-100 Index, has been on an upward trajectory, reaching new all-time highs. This bullish trend is primarily driven by strong local and foreign institutional inflows, improved macroeconomic stability, fiscal discipline, and positive corporate earnings outlooks.
Key contributors to the rise include surging exports, currency stability, rising global crude oil prices, and favorable trade deals, such as the expected US-Pakistan tariff agreement. Sector-specific growth, such as increased cement dispatches reflecting a construction boom and strong performance in energy, fertilizer, and banking stocks, have also propelled the index to record highs.
Strong institutional support, especially from local mutual funds, is maintaining the bullish momentum. A 17% year-on-year surge in exports in July 2025 indicates robust external demand. Stable Pakistani rupee and positive global market conditions boost investor confidence, while the expected US-Pakistan tariff deal enhances trade prospects and market optimism.
Macroeconomic stability and fiscal discipline promote sustained investor confidence. Sectoral growth, including a 30.1% increase in cement dispatches year-on-year, highlights infrastructure and housing projects. Strong performance by index-heavyweight stocks like Pakistan Petroleum Limited, Habib Bank Limited, Engro Fertilizers, and Oil & Gas Development Company, collectively add significant points to the index.
The KSE-100 Index has hit new all-time highs, recently surpassing 145,000 points. Increased market participation and traded volumes with high liquidity reflect strong investor interest. A positive sentiment spillover into sectors linked to economic growth and export momentum has been observed. Enhanced confidence among foreign and local investors due to improved economic indicators drives further inflows and sustains the rally.
The overall market has benefited from increased valuation, stronger corporate earnings, and improved investor sentiment that supports a sustained bullish trend. The Pakistan Stock Exchange's (PSX) benchmark KSE-100 Index closed at an all-time high of 143,037.16 points.
On Monday, the KSE-100 surged by 1,017.66 points, or 0.72%, to 142,052.65 points. Liquidity is plentiful and chasing stocks, according to AAH Soomro. The total interest to be paid in monthly instalments for the settlement involving term finance certificates issued in 2013 stands at Rs92 billion, with the balance now reduced to Rs84.3 billion. Total revenues increased 36% year-on-year to Rs17.997 trillion in FY25. Development expenditure jumped 43% year-on-year to Rs2.966 trillion in FY25.
The government reported a reduction in power sector circular debt by Rs780 billion, bringing the total down to Rs1.614 trillion. The Power Division attributed the decline to lower line losses, improved bill recovery, and cost savings from renegotiated IPP contracts. Pakistan's consolidated budget deficit for FY25 stood at Rs6.17 trillion, or 5.4% of GDP, an improvement from the previous year's 6.8%. The primary surplus improved significantly to Rs2.719 trillion, or 2.4% of GDP, compared to Rs953 billion (0.9% of GDP) in FY24. Tax revenues rose 26% to Rs12.723 trillion in FY25, while non-tax revenues surged 66% to Rs5.275 trillion in FY25. The Oil and Gas Development Company Ltd (OGDCL) received a Rs7.7 billion interest payment from Power Holding Private Ltd (PHPL).
In summary, the KSE-100's rise is underpinned by both fundamental domestic factors—such as fiscal stability, economic growth signals—and external positive catalysts like trade improvements and commodity prices, which combined have significantly uplifted overall market performance and investor confidence in Pakistan.
- The surge in Pakistan's stock market, as indicated by the KSE-100 Index, is primarily due to strong inflows from local and foreign institutional investors, resulting from fiscal discipline, improved macroeconomic stability, and positive corporate earnings outlooks.
- Rising global crude oil prices, surging exports, and favorable trade deals, such as the expected US-Pakistan tariff agreement, are external positive catalysts contributing to the soaring stock market.
- Sectoral growth, such as increased cement dispatches reflecting a construction boom and strong performance in energy, fertilizer, and banking stocks, are domestic factors enhancing the stock market's performance and investor confidence.
