PSX benchmark index up 1.5%WoW despite volatility
The successful approval of 27th Amendment by majority in both lower and upper houses settled political uncertainty, driving the index up by 3,751 points in last two trading sessions. Consequently, benchmark index closed at 161,935 points on Friday, up 1.5%WoW.
The said positive outweighed the early-week bearish sentiment stemming from continued tensions between Pakistan and Afghanistan, as peace talks concluded without a resolution and Afghanistan announced a suspension of trade with and through Pakistan.
Meanwhile, market participation weakened by 13.6%WoW with avg daily traded volume down to 944 million shares, as against 1.1 billion shares a week ago.
On the macroeconomic front, workers remittance during the month of October 2025 was recorded at US$3.4 billion, up 12%YoY. Alongside, inflows under the Roshan Digital Accounts were reported at US$250 million during October 2025, up 4.6%MoM.
Auto sector sales rose to 20,985 units, up 38%YoY.
Foreign exchange reserves held by State Bank of Pakistan (SBP) increased by US$22 million to US$14.5 billion as of November 07, 2025.
AKD Securities foresees the momentum in the benchmark index to continue given successful staff-level agreement of the IMF’s second review, minimal flood impact and improved credit ratings by global agencies amid falling fixed income yields.
Investors’ sentiments are expected to further improve on the likelihood of foreign portfolio and direct investment flows, driven by improved relations with the United States and Saudi Arabia.
This outlook is supported by the lack of alternative investment avenues and the attractive valuation of local equities.
Top picks of the brokerage include: MEBL, MCB, HBL, OGDC, PPL, PSO, FFC, ENGROH, LUCK, DGKC, FCCL, and INDU.
IMS (Intermarket Securities) has revised its cement sector earnings estimates upward by 20%, driven by higher expected demand growth of 7% in FY26 and a lower coal price assumption of US$95/ton. Sector profitability is expected to remain robust, supported by monetary easing and sustained pricing discipline. With demand near multi-year lows and substantial excess capacity, the sector has ample room for earnings growth without requiring additional capex. Top picks of the brokerage house include KOHC, offering one of the highest profitability levels and lowest valuations in its coverage. PIOC is expected to generate strong FCFE driven by monetary easing and debt repayment, enabling consistent payouts. MLCF, which benefits from diversification into stable sectors such as healthcare and fertilizer, while operating one of the industry’s most efficient plants.
Total cement demand in FY25 was recorded at 46.9 million tons, up 3.5% YoY, with industry utilization at 54%. However, domestic demand declined by 1% YoY to 37.7 million tons — the lowest since FY17. The brokerage house believes demand has bottomed out and expect a recovery in FY26 on construction activity strengthening with improving GDP growth.
The potential for sustained double-digit growth in FY26 is supported by the FY26 budget’s pro-growth measures—including a 1.5% cut in advance tax on property transactions, a 15% higher PSDP allocation of PKR4.2 trillion, and increased taxes on debt investments, which, along with falling interest rates, should redirect flows toward real estate. Exports from the South are also expected to stay strong, backed by excess capacity and favorable pricing, with volumes projected to grow around 10% annually.
The cement sector has demonstrated strong profitability and the brokerage house expects this momentum to continue, driven by sustained pricing discipline—with retention prices holding steady around PKR800/bag—and further supported by improved global clinker export prices. Cost-side dynamics have also been favorable, with muted coal prices and rising capital expenditure on energy efficiency initiatives such as solar and wind, helping producers sustain gross margins above 30%.
Balance sheets across the sector have strengthened as well, with the debt-to-equity ratio declining 16%YoY. This enhanced financial flexibility should create room for dividends, share buybacks, and potential acquisitions. Moreover, the sector’s continued focus on efficiency ensures margin resilience and positions it well to benefit from a recovery in domestic cement demand.
OMC volumes were reported at 1.5 million tons, flat YoY but up 9%MoM. HSD sales showed the strongest growth on rising goods port/ import-export flows, Kharif harvest season and rising mining haulage amidst increasing activity in Baluchistan/ KPK regions, and tightening anti-smuggling activities. MS volumes softened as pump-price elasticity kicked in, while also due to rising hi-octane sales. However, retail fuel demand remained strong (up 4%YoY in 4MFY26) due to broader macro recovery and double-digit auto sales growth YTD. Premium HOBC remained the standout on continued high-end SUV sale penetration and lower delta from MS prices.
PSO gained market share as its volumetric sales rose to 643,000 tons during October 2025, down 8%YoY but up 13%MoM, translating into a market share of 43% for the month against 41.6% a month ago. The annual decline was primarily led by weaker MS/HSD offtakes, which fell 11%YoY and 7%YoY, respectively, while HOBC sales partially offset the trend with increase of 49%YoY. Cumulatively, 4MFY26 volumes settled at 2.27 million tons (market share at 42.1%YoY), down 2%YoY, as compared to 4%YoY increase in total sector sales. Analysts expect company to close FY26 volumes with an accretion of 5%YoY, as compared to 7.2 million tons posted during FY25.
WAFI continued to outperform the peers in October 2025, posting total offtakes of 121,000 tons, up 14%YoY and 4%MoM, led by a sharp recovery in HSD (up 32%YoY) and strength in HOBC (up 62%YoY). Cumulatively, 4MFY26 sales were reported at 450,000 tons (up 19% YoY), resulting in market share of 8.4% during the period as compared to 7.3% for the same period last year, making WAFI the fastest-growing OMCs among the listed companies.
APL posted sales of 124,000 tons during the month, up 0.1%YoY, while 4MFY26 sales amounted to 450,000 tons (market share down to 8.4% from 8.8% for the same period last year.
OMC sales have grown by 4%YoY during 4MFY26, with authorities estimated to have collected PKR487 billion under the Petroleum Development Levy (PDL). The FY26 target has been set at PKR1.47 trillion, up 20%YoY, from PKR1.22 trillion collected in FY25.