PSX benchmark index declines 2.7%WoW
Pakistan Stock Exchange (PSX) remained under pressure during the week ended on July 24, 2026. The benchmark index declined by 4,782 points or 2.7%WoW to close at 171,021 points. The average daily trading volume also declined by 3.2%WoW to slightly more than 881 million shares.
As reported my Western media, Yemen’s Houthis declared a naval blockade on Saudi Arabia and claimed strikes on two Saudi oil tankers in the Red Sea, putting Bab el-Mandeb flows at risk alongside the existing disruption at the Strait of Hormuz. The US carried out strikes on Iranian military targets on twelfth consecutive night.
Brent peaked above US$101/ bbl before easing to US$97, keeping energy import and inflation concerns at the forefront.
Sentiment found some support from S&P Global upgrade of Pakistan’s long-term sovereign credit rating to ‘B’ with a stable outlook, citing stability and reform implementation.
On the macroeconomic front, yields during the T-Bills auction rose across all tenors.
Banking sector deposits increased 15.2%YoY to PKR40.9 trillion in June 2026.
Urea offtakes rose 2%YoY to 592,000 tons, driven by improving farm economics and availability of subsidies and cheaper financing. As against this, DAP sales declined 58%YoY on higher pricing.
Other major news flow during the week included: 1) Pakistan sought a US$10 billion bilateral exchange stabilization facility from the United States, 2) GoP proposed changes to the Brown field Refining Policy, 3) Pakistan purchased a spot LNG cargo at US$21.88/ mmbtu, the highest since March this year, 4) US unveiled new tariffs on 60 trade partners ranging 10-12% including Pakistan, and 5) OGRA decided to set petroleum prices on daily basis under new pricing mechanism.
Top performing sectors were: Refinery, Insurance, and Textile Spinning, while the lagged included: Jute, Sugar & Allied Industries, and Close-end Mutual Fund.
Major selling was recorded by Mutual Funds and Banks of US$31.0 million, while major buyers were Individuals and Foreigners aggregating to US2$2.5 million.
Company-wise, top performers were: YOUW, CNERYGY, PGLC, ATRL, and NESTLE, while laggards included: SSGC, SNGP, KTML, MLCF, and KOHC.
According to AKD Securities, the US-Iran conflict and international oil prices, along with monetary policy announcement would remain the key focus.
Additionally, favorable financial results for the period ended June 30, 2026 would drive the market sentiments in the near term.
Market continues to trade at attractive valuations.
Top picks of the brokerage house include: OGDC, PPL, UBL, MEBL, HBL, FFC, ENGROH, PSO, LUCK, FCCL, INDU, ILP and SYS.
In June 2026, Urea offtakes witnessed slight improvement for the second consecutive month, driven by Kharif season demand. While Urea and CAN sales improved, DAP and NP sales declined. FFC and FATIMA urea sales increased, while EFERT’s urea sales declined.
According to details, Urea offtakes increased marginally for the second consecutive month, driven by improving farm economics and availability of subsidies and cheaper financing. As a result, Urea sales in June 2026 reached 592,000 tons, up 2%YoY. The cumulative offtakes in the first three months of Kharif season rose 18%YoY to 1.5 million tons. As against this, DAP offtakes declined by 58%YoY during June to 48,000 tons, or down 36%YoY during Kharif season to 194,000 tons. The decline in DAP was largely due to surge in prices post Middle East conflict to an all-time high of PKR16,201/ bag, with average prices remaining 28%YoY higher during the season. Among other nutrients, CAN sales increased by 34%YoY, while NP sales decreased by 7%YoY during the month.
In 1HCY26, fertilizer sales remained strong, with both Urea and DAP sales rising by 7%YoY and 6%YoY, respectively, due to improving farm economics and pre-buying of stock in earlier months on expectation of price increase.
FFC and FATIMA’s Urea sales were recorded at 306,000 and 140,000 tons in June, up 14%YoY and 72%YoY as compared to 2%YoY increase in industry sales due to competitive prices. Consequently, their market share increased to 52% and 23% from 46% and14% during the same period last year. Meanwhile, FFC’s DAP sales declined by 52%YoY to 37,000 tons due to higher prices, though decline was lower than industry’s 58%YoY decline. Consequently, market share jumped to 77% in Jun’26 from 67% during the same period last year.
Notably, FFC holds 159,000 tons of DAP inventory as end June 2026 or 59% of industry.
FATIMA’s CAN offtakes also witnessed increase due to: 1) lower channel inventory and 2) higher vegetable prices, rising by 34%YoY to 121,000 tons in June. However, NP sales declined marginally by 5%YoY to 79,000 tons.
EFERT’s Urea sales decreased by 49%YoY to 106,000 tons, mainly due to higher price compared to peers. As a result, EFERT’s market share halved to 18% from 36% during the same period last year. Notably, EFERT currently holds 73% of industry urea inventory, totaling 694,000 tons. In addition, company’s DAP offtakes declined by 76%YoY as against industry’s decline of 58%YoY due to: 1) higher availability of locally produced DAP and 2) higher prices as compared to peers, leading to decline in market share to 6% from 10%.
AKD Securities expects momentum in Urea sales to continue going forward, with Kharif season offtakes projected to exceed 3.2 million tons, driven by sustained demand and supportive budgetary measures including higher allocation for subsidies for farmers, along with exemption of duties on imported agricultural machinery.
Meanwhile, the renewed escalation has led to a month-long closure of FATIMA and AGL’s RLNG-based plants amid gas shortages, which is expected to ease industry inventory levels, alleviate pricing pressure on urea, and reduce companies’ working capital requirements.
The brokerage house maintains an overweight stance on the fertilizer sector, supported by robust earnings, and strong cash flows translating into attractive dividend yields.