PSX Benchmark Index Declines 3.6WoW
Pakistan Stock Exchange (PSX) remained volatile during the week due to persistent geopolitical tensions between the United States and Iran, coupled with domestic political noise. Benchmark index declined by 6,434 points or 3.6% during the week to close at 173,170 on Friday. Market participation also slowed with the start of Ramadan, with average daily traded volumes declined by 22%WoW to 831 million shares, as compared to 1.1 billion shares in prior week.
Developments on the economic front remained encouraging, as the country posted Current Account surplus of US$121 million in January 2026, against a deficit of US$393 million in the same period last year, primarily driven by higher workers’ remittances.
Industrial activity (LSMI) expanded by 4.8%YoY in 1HFY26, led by growth in automobile and textile sectors.
Government notified PKR5/ kWh reduction in industrial tariffs, higher than initially announced by Prime Minister.
Power generation increased by 12%YoY in January 2026, supported by the incremental industrial power tariff package and imposition of gas levy on CPPs.
Fertilizer offtakes declined by 48%YoY during January 2026, mainly due to elevated channel inventory following advance procurement in prior month.
Foreign exchange reserves held by State Bank of Pakistan (SBP) increased by US$19 million to US$16.2 billion as of February 13, 2026.
Other major news flow during the week included: 1) IMF review mission to arrive Pakistan on 25th of this month, 2) Pakistan’s bonds draw biggest foreign inflows in 19 months during January this year, 3) IT exports increase by 19%YoY during January, 4) Textile exports increase by 1.3%YoY during 7MFY26, and 5) RDA inflows crosse US$12 billion mark during February 2026.
Sector-wise, Vanaspati & Allied Industries and Woollen were amongst the top performing sectors, while Refinery, Modarabas, and OMCs were the laggards.
During the first four trading sessions, major selling was recorded by Foreigners with a net sell of US$26.5 million. Individuals and Banks absorbed most of the selling with a net buy of US$14.4 million and US$12.1 million, respectively.
Top performing scrips of the week were: INIL, SSOM, THALL, BNWM, and MUREB, while laggards included: PIOC, TRG, UNITY, PSO, and MEHT.
AKD Securities expect market to recover as domestic and geopolitical uncertainties subside, with market trading at attractive valuations of forward PE of 7.3x and Dividend Yield of 6.4%.
Investors’ sentiments are also 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 are: OGDC, PPL, UBL, MEBL, HBL, FFC, ENGROH, PSO, LUCK, FCCL, INDU, ILP and SYS.
According to Topline Securities, local cement dispatches are likely to be up by 3%YoY to 3.29 million tons in February 2026. Its analysis is based on the actual numbers for 15 days, where local sales were recorded at 1.57 million tons. However, the brokerage house believes that local sales for 20 days are approximately 2.44 million tons.
The average daily domestic sales in the North were recorded at 91,000 tons in the first week (working days), increasing to 106,000 tons per day in the second week. For the third week, the brokerage house expects average daily sales to moderate to 95,000 to 98,000 tons per day, amid a slowdown in construction activity due to Ramadan.
To highlight, the brokerage house has incorporated a Ramadan adjustment in its estimates based on seasonality observed during March 2025 (Ramadan last year), when average daily dispatches witnessed a noticeable decline of 10% to 12%) across both the regions.
Average sales of south region remained in the range of 21,000 per day in 15 days.
On a month-on-month basis, local cement dispatches are anticipated to decline by 9%, primarily due to the lower number of days compared to January 2026, as well as the onset of Ramadan.
Exports in February 2026 are expected to grow 34%YoY, driven by stronger sea-based shipments from southern players, while northern exports remain suspended due to continued disruption at Afghan border.
This takes Pakistan’s total cement sales to around 4.00 million tons in February 2026, expected to be up by 7%YoY but down by 12%MoM.
In 8MFY26, total cement sales are expected to reach 34.55 million tons, up by 10%YoY. This growth is driven by 12%YoY increase in local sales, while exports are anticipated to increase by 6%YoY basis.
Total cement capacity utilization in February 2026 is estimated at 57%, compared to 64% in January 2026 and 53% in February 2025.
Average retail cement prices in the northern region increased slightly by 2% to PKR1,407 per bag in February 2026, as compared to an average of PKR1,378 per bag in January 2026, according to weekly SPI data from the Pakistan Bureau of Statistics (PBS).
The brokerage house maintains it base case assumption of 8%YoY growth in local dispatches due to pick up in construction activities and monetary easing.
SEARL has reported 2QFY26 profit after tax of PKR892 million (EPS: PKR1.52), as against a net loss of PKR370 million (LPS: PKR0.63) for the same period last year.
While the result is lower than expected, primarily driven by a higher effective tax rate of 56%, excluding this would be an earnings beat. Importantly, pre-tax profits are up 31%QoQ to PKR2.0 billion – driven by higher other income. SEARL’s revenue is up 35%YoY and 3% QoQ – rising to nearly PKR10.0 billion this quarter. This is a sharp pick-up likely driven by strong price increases which have helped counter a drop in core business volumes. Core business is in line with estimates with gross margins tracking a high 55% per quarter. SEARL is going from strength to strength. Headline numbers (both sales and margins) are very encouraging while the debt is now immaterial. Recurring earnings should stabilize granted the tax rate smoothens in the coming quarters.