PSX benchmark index up 5.0%WoW
Pakistan Stock Exchange (PSX) witnessed bullish momentum during the outgoing week, with the benchmark Index gaining 8,122 points or 5.0%WoW to close at 171,116 on Friday, May 08, 2026. Average daily trading volume decline by 9.7%WoW to 1.1 billion shares.
The dominant sentiment driver was easing of US-Iran tensions, with both sides reportedly edging towards a short-term memorandum to halt the conflict, leading international oil prices to ease by 18%WoW up to US$100.5/ barrel.
Earlier in the week, US President Trump paused the ‘Project Freedom’ naval operation in the Strait of Hormuz after one day, following a request from Pakistan and other mediating countries, citing progress towards a final agreement with Tehran. Despite an intermittent exchange of fire between U. and Iranian forces near the Strait mid-week, Trump confirmed the ceasefire remained in effect. The IMF Executive Board meeting on Friday was scheduled to consider approval of the US$1.2 billion tranche under the EFF and RSF programs.
Pakistan’s foreign exchange reserves are expected to reach US$17 billion by end June 2026.
Pakistan’s trade deficit increased by 4%YoY to US$4.1 billion in April 2026, taking 10MFY26 trade deficit to US$32.0 billion, up 20%YoY.
Cement dispatches rose 11%YoY to 3.9 million tons in April 2026, led by 20%YoY growth in local dispatches.
LSM index rose 11.1%YoY in March 2026, taking 9MFY26 growth to 6.5%YoY.
Foreign exchange reserves held by SBP increased to US$15.85 billion as of April 30.
Other major news flow during the week included: 1) Pakistan to issue US$250 million Panda bonds within 10 days, 2) GoP to end untargeted electricity subsidies, 3) Power consumers to get PKR1.75/ unit relief, 4) Government bars private OMCs from HSD imports, and 5) Pakistan rejects lowest spot LNG bids.
Top performing sectors were: Cement, Technology, and Inv. Companies, while laggards included: Textile Weaving, Leasing Companies, and Synthetic & Rayon.
Major selling was recorded by Insurance and Individuals of US$9.8 million and US$3.7 million respectively. Major buyers were Brokers and Mutual Funds with US$6.1 million and US$4.5 million respectively.
Top performing scrips were: PIOC, JVDC, PIBTL, SSGC, and GADT, while laggards included: INDU, IBFL, MEHT, THALL, and ATRL.
According to AKD Securities, the IMF Executive Board’s approval of US$1.2 billion tranche alongside the trajectory of US-Iran negotiations would remain near-term catalysts for market direction, with continued softening of oil prices to act as a supportive trigger.
Market continues to trade at attractive valuations. According to the brokerage house the benchmark Index is anticipated to reach 263,800 by end December 2026.
Top picks of the brokerage house include: OGDC, PPL, UBL, MEBL, HBL, FFC, ENGROH, PSO, LUCK, FCCL, INDU, ILP and SYS.
According to a report by Topline Securities, KSE-100 index companies have posted earnings of RKR491 billion for 3QFY26, up 19%YoY and 8%QoQ as compared to PKR412 billion in 3QFY25. In US dollar terms, profitability was reported at US$1.8 billion. This takes 9MFY26 KSE-100 index profitability to PKR1,410 billion, up 10% YoY.
Excluding OMCs/ Refineries, profits were up 5%YoY but down 2%QoQ for 3QFY26. Refineries/ OMCs reported elevated profits amidst sizeable inventory gains/ higher Gross Refinery Margins (GRMs) due to rising oil prices.
The Banking sector’s earnings rose 2%YoY and 14%QoQ to PKR169.7 billion for 3QFY26. The QoQ rise was primarily driven by growth in non-interest income amid higher capital gains on investments, wherein, UBL, BAFL, and FABL cumulatively contributed PKR44.5 billion capital gains.
The E&P sector profitability remained nearly flat on a YoY basis but grew 25%QoQ during the quarter to PKR92.7 billion. This QoQ growth was led by a 23% rise in crude oil prices, lower effective rate of the sector, and absence of dry well in OGDC.
Cement sector earnings witnessed a 9%YoY rise but a 15%QoQ fall to PKR39.5 billion in 3QFY26. YoY increase was seen due to growth in total dispatches and decline was seen on a QoQ basis due to decline in domestic dispatches and higher fuel and power cost.
Fertilizer sector’s profitability declined by 4%YoY and 36%QoQ to PKR29.1 billion due to decline in urea sales by 6%YoY and 59%QoQ amid natural tapering of seasonal Rabi demand.
Automobile sector posted a 24%YoY and 28%QoQ increase in 3QFY26, driven by a 39%YoY and 21%QoQ rise in passenger car sales, as reported by PAMA. This was supported by new-year registrations in January and the launch of new variants.
Food and personal care sector recorded a 15%YoY rise while a 45%QoQ fall in profitability to PKR18.2 billion. QoQ decrease was seen due to high base effect in 2QFY26 as National Foods (NATF) recorded a one-off profit from the divestment of A-1 cash and carry. Excluding NATF, the profits was up 36%QoQ.
Pharmaceutical sector posted a 27%YoY increase but a 29%QoQ decrease in earnings in 3QFY26. QoQ decline was seen amidst seasonality as quarter ending in December generally posts higher sales.
Within other sectors, Power recorded flattish YoY growth while increasing 3%QoQ, OMCs posted strong growth, while the Chemicals sector reported a 3%YoY and 24%QoQ increase.
The brokerage house has taken 94 companies out of the total 100 companies (that have announced their results), which represents 95.34% of KSE-100 market capitalization. It believes that adding the remaining companies of the index would not materially impact profitability growth trend.
The KSE-100 index companies announced cash dividends of PKR139.5 billion in 3QFY26, up 2%YoY compared to PKR136 billion in 3QFY25. This YoY growth was primarily driven by rise in dividend by Pakistan Petroleum (PPL).
This translates into a 28.4% dividend payout in 3QFY26 as compared to 33% in the same period last year.