pakistani Stocks Hit Record high amidst Economic Shifts
Karachi, Pakistan – August 10, 2025 – The Pakistani stock market experienced a significant surge this week, with the benchmark KSE-100 index climbing 3.08% compared to the previous week’s close. This growth was primarily fueled by robust investment from local mutual funds, as investors increasingly favor equities over other investment options.The index concluded the week at a record 145,383 points, a 4,348-point (3.1%) increase,marking its highest closing value since inception.
This positive market performance occurred alongside notable developments in Pakistan’s economic landscape. While the nation’s trade deficit expanded by 44% year-over-year to $2.8 billion in July 2025, remittances from overseas workers reached a new all-time high of $3.2 billion – a 7% increase compared to July of the previous year.
The government successfully raised Rs370 billion through a Treasury Bill (T-Bill) auction, with yields increasing modestly by 5-30 basis points across various maturities. This was supported by improvements in Pakistan’s fiscal health, with the fiscal deficit decreasing to Rs6.2 trillion, or 5.4% of GDP, down from 6.8% in FY24. This reduction is attributed to strong growth in both tax and non-tax revenue,exceeding the rate of government spending increases.
Several sectors demonstrated strong performance. Cement dispatches rose substantially by 30.1% in July 2025, driven by both domestic demand and increased exports. Petroleum sales also saw a 2% year-on-year increase, reaching 1.22 million tons, benefiting from lower prices for gasoline and diesel.
Trading activity was heightened, with average daily volume increasing by 16.3% to 653 million shares, up from 561 million shares the prior week. Investor confidence was bolstered by the ongoing earnings season, attracting significant buying interest from local institutions.
The Pakistani Rupee saw a slight recognition of 0.1% against the US dollar, closing at Rs282.47. though, the State Bank of Pakistan’s foreign exchange reserves decreased by $72 million, settling at $14.23 billion as of August 8, 2025.
Future Outlook:
Analysts at Arif Habib Ltd (AHL) and AKD Securities Ltd maintain a positive outlook for the short-term. They anticipate the KSE-100 index will continue its upward trend, supported by strong corporate earnings and progress in resolving the circular debt issue. AHL projects the index to reach 165,215 points by December 2025, citing favorable conditions in the fertilizer, banking, and energy sectors.
Sector performance varied, with textiles, insurance, and food & personal care sectors leading the gains, while Synthetic & Rayon and Sugar & allied Industries lagged. Changes were also made to the MSCI Index, including the addition of FABL to the FM Standard Index and adjustments to the categorization of other stocks.
Despite a widening trade deficit and a slight decline in foreign exchange reserves,the overall outlook for the Pakistani stock market remains optimistic,driven by robust domestic corporate performance,a stabilizing macroeconomic environment,and continued institutional investment.
