PSX Benchmark Index Posts Paltry 0.3% WoW gain
Pakistan Stock Exchange (PSX) remained range bound during the week ended on August 28, 2026.The benchmark Index posted 0.3% WoW gain to close at 177,697 points. Market activity improved, with the average daily traded volume rising by 24.7% WoW to 1.3 billion shares, as compared to 1.1 billion in the previous week.
Moody’s one-notch upgrade of Pakistan’s sovereign rating to B3 due to improvements in governance, provided a modest boost to investors’ sentiment.
The US-Iran situation remained under control, keeping oil prices below US$90/ bbl on Friday’s close, as Iran continued separate discussions with Oman and Qatar aimed at facilitating the reopening of the Strait of Hormuz.
Foreign exchange reserves held by State Bank of Pakistan (SBP) rose modestly to US$17.1 billion as of August 21, 2026.
Central bank transferred PKR1.9 trillion in profits to the Federal Government, PKR496 billion higher than the budgeted transfer.
Banking sector deposits rose by 14% YoY to PkR39.1 trillion as of end July 2026.
Other major news flow during the week included: 1) Saudi team and Prime Minister discuss investment in agriculture, real estate, energy and IT, 2) new SPV established for the privatization of three Discos, 3) Refineries to sign upgrade deals within 10 days, 4) Pakistan received US$763 million loans, grants in July this year, and 5) Government. introduces a performance based rebate on incremental exports.
Top performing sectors were: Textile Composite, FMCG, and Power, while sectors that lagged the most were: OMCs, Inv. Cos., and Technology.
Major net buying was recorded by Mutual Funds (US$6.2 million) and Companies with (US$4.3 million). Major net sellers were Foreigners with US$10.6 million.
Top performing scrips were: AICL, THALL, KTML, POWER, and ABOT, while laggards included: PGLC, SRVI, TRG, NBP, and HMB.
AKD Securities expects market to improve on strengthening economic indicators amid easing geopolitical tensions. A potential US-Iran deal could moderate international oil prices. 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.
Mari Energies (MARI) reported profit after tax of PKR37.5 billion (EPS: PKR31.2) for 4QFY26, up 99%YoY and 77%QoQ, the strongest quarterly print in history and higher than expectation on super tax reversal. Cumulatively, FY26 PAT came to PKR87.1 billion (EPS: PKR72.5), up 34%YoY, with company announcing a final dividend of PKR18.7/ share, taking FY26 pau out to PKR27.0/ share, up 24%YoY.
Net sales rose to PKR53.4 billion, up 19%YoY and 11%QoQ, with FY26 sales at PKR191.7 billion, up 8%YoY. Full-year hydrocarbon sales hit a record 41.28 million boe up 5.5%YoY, supported by commencement of Spinwam (Waziristan Block) of 50mmcfd and Shams discovery within Mari Field of 35+ mmcfd.
Exploration expenses surged 58%YoY and 70%QoQ to PKR8.3 billion, and operating expenses rose 31%YoY, with company’s exploration licenses holding growing to 72 across 155,276 sq km acreage.
Moreover, company’s reserve replacement ratio (RRR) stood at 375% for the year, with the addition of 157 million boe of 2P reserves.
The primary earnings growth driver was sharp super tax reversal of PKR18.3 billion in 4QFY26, pursuant to the judgment of the Federal Constitutional Court (FCC). Notably, full year effective taxation came to negative 5%, as compared to 26% for FY25.
Company’s trade debts remained flat YoY at PKR86 billion as of year-end, however declining by 7% on a sequential basis, reflecting improvements in receivables recovery.
Other operation highlights during the year as noted by the company were: 1) diversification into Mari Technologies which commissioned first 5MW Tier III data center (Karakoram-01) in Islamabad, and 2) MariMinerals completing 45,000+ meters of drilling.
D G Khan Cement (DGKC) posted an unconsolidated net profit of PKR3.1 billion (EPS: PKR7.01) for 4QFY26, up 23% QoQ but down 3% YoY. Earnings came in above EPS estimate of PKR6.25/ share, primarily driven by a lower ETR. This takes FY26 net profit to PKR11.4 billion (EPS: PKR26.08), up 32%YoY. The company also announced a final dividend of PKR1/ share, as against expectation of no dividend this quarter.
Key Highlights for 4QFY26:
Net sales were reported at PKR19 billion, down 5% QoQ and slightly below estimate, primarily reflecting a higher proportion of clinker exports in the sales mix, which weighed on overall retention prices.
Gross margins contracted 3ppt QoQ to 24%, coming in below 28% estimate. The sharp sequential decline was likely driven by a higher proportion of low-margin clinker exports in the sales mix relative to the prior quarter.
Other income increased 20%YoY and 21%QoQ, above the expectations, with cash and ST investments increasing 10% during the quarter.
The company reported an effective tax rate of 24% for the quarter, as compared to 26% for the same period last year.
DGKC delivered a below-expectations quarter, weighed down by a 3ppt sequential decline in margins driven by a higher proportion of clinker exports in the sales mix, though partially offset by a lower ETR. That said, DGKC is entering a new growth phase, having announced an expansion of 3.6 million tons per annum at a competitive cost of US$40/ton. Additionally, its 31% stake in RMPL provides a stable source of other income, helping to insulate earnings against the inherent cyclicality of the cement sector.
MLCF and PIOC have both notified board meetings scheduled for September 02, 2026. The meetings could potentially be related to the proposed merger, given that both companies have scheduled their meetings on the same day.
Topline Securities has conducted analysis to estimate the potential range of the swap ratio that could be considered between MLCF and PIOC.
The analysis is based on the valuation framework prescribed under the SECP Guidelines for Mergers and Amalgamations, which outlines various valuation methodologies that may be used to determine a fair and reasonable share exchange ratio.
Under the SECP Guidelines, the share exchange ratio should ideally be determined by a recognized valuation expert based on a comprehensive assessment of the financial position of both companies. The Guidelines identify four commonly used valuation methodologies: 1) Net Worth/ Break-up Value, 2) Market Value, 3) Future Earning Capacity/ DCF, and 4) Comparable Transactions.