Pakistan Stock Exchange (PSX) continued to witness volatility during the week amid persistent geopolitical tensions between the US and Iran, alongside Pak-Afghan conflict, before staging a recovery on Thursday with a gain of 4,267 points. The benchmark index declined by 5,108 points or 2.9% during the week, closing at 168,062 on Friday, February 27, 2026. Market participation improved during the week, with average daily traded volumes rising by 25%WoW to 1.0 billion shares, from 831 million shares a week ago. 

On the macro front, developments remained supportive, with the IMF review team currently in the country. In parallel, the Finance Minister’s remarks regarding the UAE’s US$2 billion loan rollover were also encouraging, providing comfort on the country’s external financing position. 

Moreover, SBP’s net FX intervention reached US$11 billion over the last 18 months as of November 2025, while SBP held FX reserves increased by US$16 million to US$16.2 billion as of February 20, 2026, despite the repayment of a US$700 million loan to the China Development Bank. 

On the currency front, PKR appreciated by 0.03%WoW against the greenback during the week, closing the week at 279.47 PKR/ US$. 

Other major news flow during the week included: 1) Trump hikes US global tariff rate to 15%, 2) IMF hints at phased tax cut approach, 3) PM Shahbaz and Qatari Emir agree to deepen economic cooperation, 4) Profit repatriation rises to US$1.67 billion in 7MFY26, and 5) CCP clears Abu Dhabi-based Eve Holdings’ acquisition of First Women Bank. 

Vanspati & Allied Industries, Fertilizer, and Automobile Parts & Accessories were amongst the top performing sectors, while Tobacco, Synthetic & Rayon, and Property were amongst the laggards.

Major net selling was recorded by Individuals and Foreigners with a net sell of US$18.0 million and US$17.3 million, respectively. Banks absorbed most of the selling with a net buy of US$33.9 million.

Top performing scrips of the week were: 1) SSOM (up 19.7%WoW), 2) AKBL (up 7.2%WoW), 3) THALL (up 6.8%WoW), 4) POL (up 5.1%WoW), and 5) BAFL (up 5.1%WoW), while top laggards were, included  1) UNITY (down 29.8%WoW), 2) SSGC (down 19.8%WoW), 3) TRG (down 14.2%WoW), 4) YOUW, and IBFL.

The brokerage expects the market to recover as domestic and geopolitical uncertainties subside, with market trading at attractive valuations of forward PE of 7.2x and Dividend Yield of 6.6%. We forecast the KSE-100 Index to reach 263,800 by Dec’26. Furthermore, Investor sentiment is expected to improve on the likelihood of foreign portfolio and direct investment flows, driven by improved relations with the US and KSA. Our top picks include OGDC, PPL, UBL, MEBL, HBL, FFC, ENGROH, PSO, LUCK, FCCL, INDU, ILP and SYS.

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