PSX average daily trading volume declines by 26%WoW
Pakistan Stock Exchange (PSX) remained subdued during this past week, with the escalation of the US-Iran conflict, now in its seventh month, being the primary headwind, following US strikes on Iran and subsequent Iranian retaliatory strikes on US air bases in the region. Market activity also weakened, with average daily trading volume declining by 26%WoW to 971 million shares.
Consequently, Brent crude surged to a six-week high of US$97.6/ bbl during the week, while the benchmark Index declined 2,368 points, down 1.3%WoW to close at 175,329.
However, negative sentiments were partially offset by Pakistan’s record US$3 billion dual-tranche Eurobond issuance, which achieved the lowest spreads over US Treasuries in two decades and marked the country’s largest-ever international capital market transaction.
Trade deficit widened 10%YoY to US$3.2 billion in August 2026, although it narrowed 20%MoM despite higher international oil prices.
CPI for August 2026 accelerated to 11.1%YoY (9.2%YoY in June 2026) on higher Transport and Food prices.
FBR surpassed its 2MFY27 revenue target by PKR12 billion, while the government raised PKR657 billion through T-Bill auctions, with yields ranging between 11.39% and 11.99% across tenors.
Cement dispatches edged down 0.7%YoY to 4.0 million tons amid monsoon rains, while petroleum offtakes declined 3%YoY to 1.3 million tons due to transporters strikes.
Other major news flow during the week included: 1) Pakistan to head joint defence secretariat under Makkah Defence Alliance, 2) GoP made record PKR1.2 trillion early repayment of central bank debt, 3) IMF cites Pakistan as model for debt, growth and reform drive, 4) Cotton arrivals rose 27%YoY to 1.7 million bales in August 2026, and 5) foreign exchange reserves held by SBP rose modestly to US$17.1 billion as of August 28, 2026.
Top performing sectors were Textile Composites and Refineries, while the laggards included Banks, Pharmaceuticals, and Technology.
Major selling was recorded by Mutual Funds (US$18.1 million) and Foreigners (US$7.4 million). Net buyers were Individuals with US$16.6 million.
Top performing scrips were: PGLC, THALL, EFERT, TPLRF1, and ILP, while laggards included: PSEL, SCBPL, SRVI, KOHC, and BAHL.
AKD Securities expects the market to improve on the back of strengthening economic indicators and a strong fiscal position, while moderating inflation should increase the likelihood of interest rates returning to single digits by year-end.
Additionally, a potential US Iran deal could moderate international oil prices towards pre-conflict levels. 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.
Oil and Gas Development Company (OGDC) reported profit after tax of PKR127 billion for 4QFY26 (EPS: PKR29.55). Earnings came in significantly above estimated EPS of PKR11.85, primarily due to a large tax reversal, while profit before tax was broadly in line with the estimates. This brings FY26 net profit to PKR242 billion, up 43%YoY. The company announced a final cash dividend of PKR6.0/ share taking the full-year payout to PKR17/ share.
Key result highlights for 4QFY26:
Net sales were reported at PKR149 billion, up 39%QoQ and 65%YoY. The YoY increase was primarily driven by higher oil and gas prices during the quarter, up 52%YoY and improved oil and gas production up 15% and 25%, respectively.
Operating expenses were up 45%YoY to PKR51 billion, where the increase was due to higher drilling activity during the quarter.
Exploration and Prospecting expenses were up a sharp to PKR10.9 billion as the company continues its aggressive exploration plan to increase oil and gas production.
Share of profit from associates was up a robust 46%YoY to PKR5.1 billion, mainly driven by a one-off tax reversal booked by the associate company, MARI.
The company recorded a tax reversal of PKR44 billion, which was likely related to the reversal of super tax provisions recorded in previous years, following the Federal Constitutional Court’s judgment.
Excluding the large one-off tax reversal recorded in the same quarter last year, OGDC has delivered a broadly neutral result, with higher operating and administrative expenses keeping profit before tax in check.
While the increase in exploration and prospecting expenses is a near-term earnings drag, it underscores the company’s continued commitment to expanding its oil and gas production portfolio.
Another key positive takeaway was the PKR18.8 billion YoY decline in receivables, indicating collections of more than 100% during the period and, importantly, no further build-up in circular debt.
Analysts remain bullish on OGDC’s medium- to long-term prospects, as the government continues to deliberate on measures to address the existing gas-sector circular debt, while sizeable discoveries such as Baragzai position the company well to drive further earnings growth over the next few years.
Mari Energies (MARI) has reversed prior years’ super tax amounting to PKR17.2 billion, in line with the Federal Constitutional Court judgment.
Next steps for the Waziristan Block include the testing and tie-in of Shewa-3 ST1, drilling Spinwam-2, submitting the Shewa-Spinwam Field Development Plans, and expanding facility capacity to 200 MMSCFD by FY29-FY30.
Against the Ghazij Shawal allocation of 222 MMSCFD, 25 wells have been drilled in Ghazij so far, with a cumulative production potential of 120MMSCFD.
Post-monsoon, seismic operations will commence in both the Indus and Makran offshore areas.
The HRL Pressure Enhancement Facilities (PEF) project is progressing as scheduled, with CO2 injection targeted for FY27-FY28.
The Islamabad data center, constructed through its subsidiary Sky47, was built and energized within 12 months of groundbreaking, well ahead of the 18-month international benchmark for projects of this scale.
The Federal Government renewed the Mari Field lease in Aug 2026, extending it until 2065.
Financing for GHG Emissions Mitigation (GEM), a joint venture with Ghani Chemical Industries Limited has been finalized with Habib Bank (HBL). Plant delivery is expected within 7–8 months, with commissioning targeted 15–18 months after opening the Letter of Credit (LC).