PSX surges to all-time high in August as reforms, rating upgrade lift investor confidence

The Pakistan Stock Exchange sustained its bullish momentum in August, reaching an all-time high of 150,591 points, before closing lower.

Its benchmark KSE-100 index closed at 148,618 points, posting a monthly gain of 9,227 points.

The rally was underpinned by robust institutional and fund inflows, further supported by the ongoing result season.

Moreover, credit rating agency Moody’s upgraded Pakistan’s sovereign rating to Caa1 from Caa2, citing improving external buffers, fiscal consolidation, and reform progress under the International Monetary Fund (IMF) program, according to a report of Arif Habib Ltd.

According to the Ministry of Finance , the overall fiscal deficit narrowed to PKR 6.2 trillion—around 5.4% of GDP—improving from 6.8% in FY24. This progress was driven by robust growth in both tax and non-tax revenues, outpacing the rise in expenditures.

The current account deficit narrowed to $254 million in July, reflecting a 37% decline from $348 million in the same month last year.

Meanwhile, headline inflation for July clocked in at 4.1% compared to 3.2% in June.

In the MSCI Index Review for August, one stock (FABL) was added to the FM Standard Index, while two stocks (IDYM and JGICL) were added and two removed (HABSM and OCTOPUS) from the Small Cap Index.

In addition to this, the circular debt declined to PKR 1,614 billion during June.

During August, the average traded volume decreased by 4% to 737 million shares, while the average traded value increased by 20% to 150 million.

The report said that sectors that garnered the most activity during the month were banks, technology, food, and cement, reporting average volumes of 86.2 million , 77.8 million, 69.4 million, and 49 million, respectively. On a scrip-wise basis, volumes were led by BOP at 33.3 million, WTL 28.7 million, PIBTL 25.1 million, KOSM 18.1 million, and KEL 17.9 million.