PSX hits record high of 154,277 points
- Cement, banks, and energy lead gains as economic stability supports positive market sentiment
Pakistan Stock Exchange (PSX) remained positive throughout the week, with the benchmark index posting CYTD’s 4th highest weekly return of 3.8%, closing at a record high of 154,277 points.
Market participation also increased by 19%WoW, with average daily traded volume increasing to 1,068 million shares from 899 million shares a week ago.
The rally was supported by successful China visit of prime minister, improving industrial activity, easing inflation, and strong corporate results. Cement sector led the gains, driven by a pick-up in domestic demand as local offtakes posted double-digit growth for the second consecutive month alongside rising mortgage lending. Commercial Banks followed on the back of robust results.
During the week, prime minister concluded his China visit, signing US$8.5 billion worth of MoUs and JVs at the second Pak-China investment conference.
On the macro front, August 2025 inflation came in softer than expected at 3.0%YoY against 4.1%YoY, petroleum sales rose 7%YoY on improved demand, and local phone manufacturing surged 2.1x YoY in July 2025.
At Wednesday’s T-bill auction, 1-month paper yield declined to 10.75%.
Trade deficit widened 30%YoY in August 2025 due to weaker exports.
Other major news flow during the week included: 1) PKR2.6 trillion debt repaid ahead of schedule, 2) SBP governor sees GDP growing 3.45% to 4.25% in FY26, 3) digital currency to be legalized once regulation is in place, 4) cotton arrivals increase by 9%YoY, and 5) SBP forex reserves increase to US$14.3 billion as of August 29, 2025.
Cement, Refinery, and Power generation were amongst the top performing sectors, while Jute, Synthetic & rayon, and Vanaspati & allied industries were among the laggards.
Major selling was recorded by Banks and Foreigners amounting to US$22.4 million. Individuals and Mutual funds absorbed most of the selling with a net buy of US$19.7 million.
Top performing scrips of the week were: BOP, HGFA, NBP, JVDC, and AKBL, while laggards included: PKGP, SCBPL, JDWS, IBFL, and UPFL.
According to AKD Securities, PSX is expected to remain positive in the coming weeks, with the upcoming MPC and any developments over circular debt remaining in the limelight.
The benchmark index is anticipated to sustain its upward trajectory, primarily driven by strong earnings in Fertilizers, sustained ROEs in Banks, and improving cash flows of E&Ps and OMCs, benefiting from falling interest rates and economic stability.
Top picks of the brokerage house include: OGDC, PPL, PSO, FFC, ENGROH, MCB, LUCK, DGKC, FCCL, INDU, and SYS.
Pakistan Petroleum (PPL), the operator of Dhok Sultan, has made an oil and gas discovery at its well “Dhok Sultan-03”. To note, this is the second discovery made by PPL in this block.
PPL, as an operator of the block, holds 75% working interest, along with its JV partner, Government Holdings Private Limited, which holds 25%.
The well Dhok Sultan-03 was spudded on January 18, 2025 and drilled down to a depth of 5,815 meters to test the hydrocarbon potential of the naturally fractured carbonates of Patala and Lockhart formations.
During testing, the well flowed 1,469bpd of oil and 2.56mmcfd of gas at Wellhead Flowing Pressure (WHFP) of 1,147 psig on a 32/64″ choke, and 2,113bpd of oil and 4.13mmcfd of gas at WHFP of 813 psig on a 48/64″ choke.
The brokerage house estimates this discovery to have an annualized impact of PKR1.76/share on company’s profitability.
The brokerage house has a ‘BUY’ stance on PPL with an end December 2025 TP of PKR281/share, offering an upside of 55% from current levels. Its stance remains anchored in the backdrop of ongoing structural gas price reforms, progress on circular debt resolution, stake in PIOL, Abu Dhabi Offshore Block-5 and PPL’s diversification into mining assets namely Reko Diq, BLZ Project, and exploration licenses in Chagai.
According to Topline Securities, urea sales for August 2025 were up 46%YoY and 34%MoM, with closing Inventory at 1.06 million tons despite continued higher discount by select manufacturers during the month.
EFERT continued average discount of PKR269/bag, a portion of which was rolled back in with the commencement of September 2025. Analysts believe this push sales backed by incentives would also have resulted in pre buying by some dealers in August 2025.
Total 8M2025 Urea offtakes were reported at 3.77 million tons, down 10%YoY, as compared to 4.21 million tons in 8M2024, mainly due to weak farm economics.
The closing inventory of urea is estimated around 1.06 million tons at end August 2025, down from 1.23 million tons in July 2025.
EFERT has the highest inventory of 493,000 tons followed by FFC of 272,000 tons, and FATIMA of 228,000 tons.
Among the companies, EFERT is expected to record massive increase of 71%YoY in urea sales to 278,000 tons in August 2025 while FATIMA is expected to record a urea sales of 173,000 tons, up 32%YoY followed by FFC of 323,000 tons, up 29%YoY in August 2025.
Total DAP sales during Aug-2025 is anticipated to be 125,000 tons, up 41%YoY and up 17%MoM. For 8M2025, total DAP offtake is anticipated at 687,000 ton, down by 14%YoY.
Company wise data suggests, FFC and EFERT are likely to record sales of 107,000 tons and 7,000 tons respectively, followed by others of 11,000 tons in August 2025.
Closing inventory of DAP is likely to be around 311,000 tons in August 2025 as compared to 312,000 tons in June 2025 and 232,000 tons in August 2024.
Going forward, analysts expect Urea inventory to remain elevated due to recent floods and it is expected to close December 2025 with slightly more than 1.4 million tons inventory.