PSX benchmark index up 0.4%WoW despite volatility
Sentiments likely to improve on the likelihood of foreign portfolio, direct investment flows, driven by improved relations with US, Saudi Arabia
Pakistan Stock Exchange (PSX) experienced volatility throughout the week, driven by geopolitical tensions. However, a positive momentum prevailed as geopolitical dust settled along with news of defence export deals with multiple regional partners and encouraging macro developments. The benchmark Index witnessed a weekly gain of 689 points or 0.4%WoW to close at 185,099 points on Friday January 16, 2026.
Market participation declined by 24.5%WoW with average daily trading slipping to 1.2 billion shares, from 1.6 billion shares in the prior week.
On the macroeconomic front, LSM index increased by 10.4%YoY in November 2025 while posting growth of 6%YoY during 5MFY26.
In the latest PIB auction, yields declined on all the tenors.
Fertilizer sector marked the highest ever annual urea sales in CY25.
Auto sales reported at 17,000 units in December 2025, down 6%YoY.
Foreign exchange reserves held by State Bank of Pakistan (SBP) increased by US$16 million to US$16.1 billion as of January 09, 2025.
PKR appreciated against the greenback during the week to 279.95 PKR/ US$.
Other major news flow during the week included: 1) Turkey confirms talks on defence pact with Pakistan and Saudi Arabia, 2) Petrol, diesel prices to remain unchanged for next fortnight due to the increase in Petroleum Levy, 3) Pakistan announces plan to develop Port Qasim into climate-resilient industrial complex 4) Pakistan, Saudi Arabia eye joint mining investments at Future Minerals Forum, and 5) Government announces plan 6,000 acre Export Processing Zone on Pakistan Steel Mills land.
Transport, Paper & Board, Oil & Gas Exploration Companies, Property, Automobile Parts & Accessories were amongst the top performers, while Synthetic & Rayon, Jute, Miscellaneous, Textile Weaving, and Textile Spinning were amongst the laggards.
During the week, major buying was recorded by Individuals and Mutual Funds with a net buy of US$16.1 million and US$12.8 million, respectively. Banks and Insurance Companies were major sellers with net sell of US$23.5 million and US$15.8 million, respectively.
Top performing scrips of the week were: ATLH, AKBL, LOTHCEM, OGDC, and JVDC, while laggards included IBFL, SAZEW, AICL, PABC, and YOUW.
AKD Securities foresees the positive momentum at PSX to continue due to further monetary easing driven by improving external account position and continuous focus on reforms amid political stability.
The brokerage house forecast the benchmark Index to reach 263,800 by end December 2026.
Investors’ sentiments are expected to improve on the likelihood of foreign portfolio and direct investment flows, driven by improved relations with the United States and Saudi Arabia.
Top picks of the brokerage house include: OGDC, PPL, UBL, MEBL, HBL, FFC, ENGROH, PSO, LUCK, FCCL, INDU, ILP and SYS.
D G Khan Cement Company (DGKC) announced its 1QFY26 financial results, reporting earnings of PKR2.1 billion (EPS: PKR4.9) as compared to earnings of PKR804 million (EPS: PKR1.8) during the same period last year. The result is below market expectations, mainly due to lower-than anticipated margins. Revenue inclined by 29%YoY to PKR19.8 billion, from PKR15.3 billion, driven by 14%YoY increase in total offtakes to 1.35 million tons. Gross margins improved to 21.7% from 19.6%, supported by decline in coal prices and grid tariffs. Operating expenses were reported at PKR1.3 billion, up 13%YoY, mainly due to higher distribution expenses given 11%YoY increase in exports. Finance cost dropped by 73%YoY to PK431 million, owing to 48%YoY reduction in outstanding debt and decline in interest rates. ETR during the quarter was reported at 37% as compared to 39% in 1QFY25. AKD Securities maintains a ‘Buy’ stance on DGKC with a June 2026 DCF target price of PKR320.9/ share. The positive view is based on: 1) declining finance cost amid easing interest rates and deleveraging, 2) improving export prices given increase in global demand, and 3) incline in utilization to enhance fixed cost absorption.
Topline Securities expects its E&P universe to post a 15%YoY decline in earnings in 2QFY26, primarily due to a decline in gas production and oil prices. Oil production averaged 64,700 bpd during the quarter, reflecting a 2%YoY increase, while gas production fell 4% to around 2,732 mmcfd. The impact of this decline in gas volumes was compounded by a 13%YoY decrease in Arab Light crude prices, which averaged US$65.37/ barrel in 2QFY26. In addition, a 48%YoY decline in other income, driven by the absence of one-off gains and a lower interest rate, is likely to further weigh on profitability.
On a sequential basis, sector earnings are expected to witness a 7% decline, despite a 4% improvement in oil volumes during the quarter, as the decline in gas production combined with weaker oil prices is likely to more than offset the gains.
OGDC is expected to report EPS of Rs7.83/ share, down 19%YoY and 12%QoQ. The decline in earnings is primarily driven by 2 dry wells (Khatian and Jakhro North) during the quarter, along with lower production, mainly from Uch, where output fell 13%YoY and 23%QoQ due to Annual Turnaround Activity (ATA). OGDC is expected to announce a cash dividend of PKR3.5/ share for 2QFY26.
PPL is expected to report EPS of PKR7.44/ share, down 26% YoY and up 1%QoQ. The YoY drop in earnings is largely attributable to the absence of one-off gains recorded in 2QFY25, such as an insurance claim and reversal of impairment losses, which had inflated other income in the base period. PPL is expected to announce a cash dividend of PKR2.0/ share along with the results.
MARI is expected to post EPS of PKR12.59/ share, up 35%YoY but down 3%QoQ. Earnings are likely to grow on a YoY basis, due to a decrease in OPEX to US$2.86/ boe, from US$4.78/boe in 2QFY25. MARI is not expected to declare any interim dividend along with 2QFY26 results, consistent with the prior year trend.
POL earnings are projected at PKR18.35/ share, down 31%YoY and 4%QoQ. The YoY decline is likely to be led by a more than 3x increase in exploration cost, due to seismic activity in Ikhlas EL and Pariwali D&P. POL is expected to announce a cash dividend of PKR20/share for 2QFY26.
Topline Securities maintains it overweight stance on the Pakistan E&P sector.