Karachi: The Karachi Stock Exchange's benchmark KSE-100 index closed November at the 166,000 mark, reflecting a 3% month-on-month gain. This came amid a lack of significant market triggers and continued regional unrest between Pakistan and Afghanistan. Foreign investors were net sellers, while local individuals and banks were net buyers. Notably, Pioneer Cement (PIOC) surged by 64% month-on-month, while Maple Leaf Cement (MLCF) rose by 10%, buoyed by MLCF’s announcement of its intention to acquire a 58% stake in PIOC. Meanwhile, Fauji Fertilizer Company (FFC) saw a 20% increase due to its inclusion in the KMI-30 Index. In contrast, Pioneer Cement Limited (PABC) experienced a 15% decline, impacted by its significant revenue exposure to Afghanistan.
In its quarterly review, MSCI included Meezan Bank Limited (MEBL), Bank of Punjab (BOP), and Askari Bank Limited (AKBL) in the MSCI Frontier Market Index. The review also resulted in 11 additions and one deletion in the MSCI FM Small Caps Index, raising the number of Pakistani constituents to 106.
Oil prices remained below $60 per barrel due to increased U.S. crude inventories, easing supply risks from a potential Ukraine-Russia peace deal, and a global trade slowdown. Reports indicate that Saudi Arabia might reduce Asian oil prices to a five-year low.
The suspension of Pakistan-Afghanistan trade, effective since October 11, 2025, has caused economic losses and logistical challenges, hitting Afghanistan hardest due to its reliance on Pakistan for trade. The three-month border closure could cost Pakistan approximately $150 million in exports. However, sectors previously affected by smuggling, such as petroleum, steel, and electronics, may benefit from reduced illicit inflows.
Inflation in Pakistan remains a concern, with CPI expected to exceed 6% in November 2025 due to rising food prices. The current account recorded a $112 million deficit in October, driven by a widening trade deficit as imports increased. Despite this, the balance of payments remains in surplus, supported by stable inflows. The upcoming Monetary Policy Committee meeting on December 15 is unlikely to adjust the policy rate.
Pakistan anticipates the next IMF disbursement following the publication of a governance and corruption report. The IMF Board meeting on December 8 will review the second Extended Fund Facility tranche and the first Resilience and Sustainability Facility review, potentially unlocking a $1.2 billion disbursement. Analysts suggest market consolidation with potential upside driven by earnings growth, particularly for companies involved in gas-sector receivables and those with strong earnings growth such as AGP, MLCF, and SYS.