The Pakistan Stock Exchange closed the outgoing short trading week at an all-time high after reversing early losses. Initially, the market opened on a bearish note as rollover pressures dominated investor sentiment. However, buying interest revived sharply in the final session, lifting the benchmark index to new territory. Consequently, the KSE-100 index crossed the 172,000 level for the first time in its history. This performance stood out, especially as rollover weeks usually trigger profit-taking and caution.
Shortened Trading Week Fails to Slow Momentum
The four-day trading week remained shortened due to the Quaid-i-Azam’s birthday holiday on December 25. Despite limited sessions, the market delivered a strong rally. Typically, investors adjust futures positions during rollover weeks, which leads to selling pressure. This time, however, confidence outweighed caution, and late-session buying changed the market’s direction. As a result, the index ended the week firmly in positive territory.
PIA Privatisation Emerges as Key Catalyst
The successful privatisation of Pakistan International Airlines played a central role in boosting market confidence. The government sold a 75 percent stake to a consortium led by the Arif Habib Group. The transaction valued at Rs135 billion marked one of Pakistan’s largest privatisation deals. Investors viewed the deal as a signal of policy continuity and reform momentum. Therefore, sentiment improved across multiple sectors.
Rate Cut and T-Bill Auction Strengthen Outlook
Monetary easing further supported the rally during the week. The State Bank reduced the policy rate by 50 basis points to 10.5 percent. Lower borrowing costs encouraged equity exposure and risk-taking. In addition, strong demand at the latest treasury bills auction reinforced optimism. The government raised Rs883 billion against a Rs600 billion target. Meanwhile, yields declined across all tenors, reflecting easing financial conditions.
Volumes, Flows, and Sector Performance
Average daily trading volume reached 736 million shares, while traded value stood at Rs31.5 billion. Despite volatility, the index closed the week up 996 points at a record 172,401 level. Property stocks led gains with an 11.3 percent weekly rise. Technology, fertiliser, paper, board, and modaraba sectors also advanced. In contrast, investment banks, weaving, woollen, and vanaspati sectors recorded declines. Mutual funds emerged as major net buyers, while insurance companies booked net selling.
Outlook Remains Constructive
Investor sentiment also improved following the release of external funding tranches under international support programmes. Moreover, foreign interest increased amid improving ties with major global partners. The rupee posted a marginal weekly gain against the dollar. Analysts expect momentum to persist, supported by easing policy, improving macro stability, and attractive equity valuations. Currently, the KSE-100 trades at an earnings multiple of 8.0x and offers a dividend yield of 6.5 percent, strengthening its appeal.
