Pakistan's stock market outlook remains positive

Pakistan's stock market outlook remains positive going forward, driven primarily by specific scrips and sectors in response to various triggers and corporate results.

An analyst at AKD Securities predicted that the KSE-100 Index will continue its upward momentum through the remainder of the calendar year 2025, anticipating the index to reach 165,215 points by December.

“This growth will largely be driven by the strong profitability of fertilizer companies, higher sustainable returns on equity (ROE) from banks, and improving cash flows of exploration and production (E&P) companies and oil marketing companies (OMCs), benefiting from declining interest rates.”

On the other hand, an analyst from Spectrum Securities observed that the stock market is currently undergoing a consolidation phase, with the index moving within a narrow band below its short-term moving averages.

Post-earnings announcements have propelled only a few stocks, such as Lucky Cement (LUCK), to new high territories. Meanwhile, the majority of the index-heavy segments such as E&P, fertilizer, and banks have seen declines.

“On the macro front, focus has shifted to the IMF review and the successful conclusion of the review before the new tranche is released. We don’t foresee any major hurdles in this review, and the next tranche is expected to be released as scheduled,” the Spectrum analyst stated.

Next week, one major initial public offering (IPO), Barkat Frisian, will open for subscription and is expected to be oversubscribed at the upper end of its IPO price of PKR 18.2, given the company's strong growth prospects.

An analyst at AHL Securities expressed optimism for the market in the upcoming week. With the ongoing result season, specific stocks are anticipated to garner interest due to their expected strong financial performance. The scrips continue to trade at attractive levels, which could further entice investors.

“The KSE-100 is currently trading at a price-to-earnings ratio (PER) of 6.1x (2025) compared to its 10-year average of 8.0, offering a dividend yield of approximately 8.3% compared to its 10-year average of around 6.5%,” the analyst noted.

During the week ended February 14, the benchmark KSE-100 Index increased by 1.6%, attributed to strong corporate earnings announcements for the December quarter. Investor participation rose as average traded volume and value for the week increased by 21% and 30%, respectively.

However, foreign investor selling continued, clocking in at USD 5.7 million over four days, compared to a net sell of $9.9 million the previous week.