The KSE-100 came under pressure this week amid renewed US-Iran tensions and higher oil prices, falling from 175,329 points last week to 170,512 points, a 2.75% WoW decline. Investor sentiment remained cautious as geopolitical uncertainty and concerns over higher energy prices continued to weigh on market activity.
§ Oil production improved 1.8% WoW to 68.4k bopd, mainly due to higher flows from Adhi, KPD and Sharf, while gas production increased 2.0% WoW to 3,088 mmcfd, driven by higher production from Mari, Uch and revival in production from Shewa at 68 mmcfd
§ Remittances by overseas Pakistani increased by 17% YoY to USD 3.7bn during Aug’26 compared to USD 3.1bn during Aug’25. MoM, remittances rose 1%. In 2MFY27, remittances rose 15% YoY to USD 7.3bn.
§ FY26 cement sector profits rose 13% YoY to PKR 138bn, supported by 7% higher dispatches to 50.5mn tons, higher utilization of ~60%, and a 33% decline in finance costs.
§ The IMF is expected to visit Pakistan on 23-Sep’26 to review progress under the USD7bn EFF and USD1.4bn RSF programmes. The mission is likely to stay until early October and conduct the 4th EFF and 3rd RSF reviews for the year ended June 2026.
§ Total liquid FX reserves increased 5.3% WoW to USD23.7bn, with SBP reserves up 7.0% to USD18.3bn, while banks’ reserves remained broadly stable at USD5.4bn; import cover improved to 2.74 months from 2.56 months.
§ Naya Nazimabad Apartments REIT saw strong demand, with the book building oversubscribed 8x and the public offering 4.3x oversubscribed. The REIT raised PKR 1.01bn against the total demand of PKR 5.6bn.
§ Petroleum prices rose under the new daily pricing mechanism: MS up PKR 21.8/liter to PKR 370.8/liter, HSD up PKR 23.72/liter to PKR 398.4/liter, tracking the seven-day average of Platts prices; PL, IFEM, and OMC margins remain unchanged.
§ The PKR appreciated marginally by 0.03%, closing at PKR 277.32/USD versus PKR 277.41/USD previously.
Outlook and Recommendation
Going forward, market direction is likely to remain sensitive to developments in the US-Iran conflict and the upcoming monetary policy decision, while the IMF review is expected to drive market sentiment.
The KSE-100 Index is currently trading at a P/E of 7.5, offering a dividend yield of 6.5%.
Our top picks include OGDC, PPL, FFC, LUCK, MLCF, NBP, HUBC, ENGROH, PSO, DGKC and SAZEW.
Courtesy: AHL Research
