PSX benchmark index declines 2.5%WoW
Pakistan Stock Exchange (PSX) remained bearish during the week ended on Friday, February 13, 2026, on investors’ skepticism over political developments and recent domestic security incidents. These concerns coupled with delay in the financial close of Reko Diq, weighed on Oil & Gas sector, which recorded the largest index point pullback during the week. Overall, the benchmark index declined by 4,526 points or 2.5%WoW, ending the week at 179,604 points. Market participation strengthened during the week, with average daily trading volume rising by 8%WoW to 1.1 billion shares, from 983 million shares in the prior week.
The pressure was partially eased by supportive macro developments: 1) budget surplus of PKR542 billion or 0.4% of GDP in 1HFY26 as against a deficit of PKR1.5 trillion in the same period last year, 2) a 15%YoY rise remittances sent by oversees Pakistanis to US$3.5 billion in first month of current calendar year, and 3) auto sales reaching a 43-month high during the outgoing month.
Moreover, in MSCI’s February 2026 Index review, ABOT was deleted from FM Index. In addition, SEPL and ZAL were added to the MSCI FM Small Cap Index, while LPL was removed.
Foreign exchange reserves held by State Bank of Pakistan (SBP) increased by US$21 million to US$16.2 billion as of February 06, 2026. On the currency front, PKR appreciated by 0.03%WoW against the greenback during the week, closing the week at PKR279.62/ US$.
Other major news flow during the week includes, 1) UAE extends US$2 billion lifeline to Pakistan ahead of IMF talks, 2) Moody’s changes Pakistan banking outlook to stable, 3) US approves US$1.3 billion financing for Reko Diq project, 4) Pakistan, Indonesia take fresh steps to deepen trade and investment ties, and 5) GoP announces to invest US$1 billion in AI by 2030.
Vanspati & Allied Industries, Inv. Banks/ Inv. Cos./ Securities Cos., Pharmaceuticals, Chemical and Transport were amongst the top performing sectors, while Textile Spinning, Oil & Gas Exploration, Jute, Synthetic & Rayon and Technology & Communication were amongst the laggards.
Major buying was recorded by Mutual Funds and Individuals with a net buy of US$29.6 million and US$13.0 million, respectively. Foreigners and Brokers were major sellers with net sell of US$25.9 million and US$15.9 million, respectively.
Top performing scrips of the week were: AGP, SSOM, ENGROH, SCBPL, and CPHL, while laggards included: UNITY, PPL, PKGP, BOP, and TRG.
AKD Securities expects market to recover as domestic and geopolitical uncertainties subside, and investor focus is likely to remain on upcoming financial results and improving macros. It forecasts the bench mark 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.
Bank AL Habib (BAHL) has reported 4QCY25 profit after tax of PKR5.8 billion (EPS: PKR5.20), down 23%YoY and 16%QoQ. Key highlights include: 1) a capital loss of PKR793 million as against PKR975 million gain in 3QCY25, and 2) a 55% effective tax rate against an estimated 53%. Results were accompanied with an impressive final cash dividend of PKR4.50/ share.
NII came off 5%QoQ to PKR31.4 billion, down 19% YoY.
BAHL reported decent balance sheet growth with deposits rising 14% YoY. Investments rose 5%YoY with advances coming off 13%YoY.
BAHL reported a net provisioning reversal of PKR190 million as compared to a minor net provisioning charge of PKR449 million in the previous quarter. Total coverage stood at more than 100% in the previous quarter.
Fee income improved sharply from earlier quarter, up 40%QoQ to PKR4.1 billion – likely driven by improved trade/ remittance commissions. This helped mask a capital loss of PKR793 million, while Fx income also continued to normalize, down 16%QoQ to PKR1.8 billion). This took the total non-markup income to PKR7.3 billion, down 8%QoQ.
Core admin expenses rose 23%YoY and 4%QoQ to PKR25.8 billion. However, lower NFI led the cost/ income to a high 67% as compared to 46% for the same period last year and 61% in 3QCY25.
Effective tax rate appears elevated at 55%.
Fee income is beginning to recover where BAHL holds 12% and 8.5% market share in trade/ remittances respectively, while NII remains on track. Brick and mortar expansion still appears to be central to growth but any deceleration in the pace of admin expenses and C/I under the 60% mark will act as a key trigger.
BAHL is a top banking play. Intermarket Securities liking is affirmed by the higher-than-expected payout in last quarter at PKR4.50/ share as compared to PKR3.50/ share in nine months.
Auto sales in January 2026 were reported at 23,055 units, rising a robust 36%YoY and 74%MoM. The strong sequential growth reflects the typical January seasonality, where purchases are often deferred to the new calendar year, while YoY expansion highlights improving sector tailwinds amid lower interest rates and relatively better demand conditions. Tractor sales, however, were recorded at 2,505 units, declining 9%YoY and 26%MoM, pointing to continued weakness in the rural economy. Meanwhile, Trucks and Buses sales surged to 1,002 units, reflecting improving activity levels, partly supported by stricter enforcement of axle-load regulations.
Auto sales continue to show strong growth, with 7MFY26 industry volumes up 84% despite restrictions on auto financing. While near-term momentum remains encouraging, the sector faces key overhangs, including pending regulatory clarity on the New Energy Vehicles (NEV) policy and intensifying competition from Chinese OEMs. That said, recent government measures, notably the abolition of car imports under the Personal Baggage Scheme and tighter eligibility under the remaining Gift and Transfer of Residence schemes, should provide incremental support to domestic assemblers by curbing parallel imports.