Karachi: The Karachi Stock Exchange experienced a robust climb this week, with the KSE-100 Index advancing by 5,375 points, marking a 3.0% increase. The index closed at 184,410 points, driven by positive macroeconomic indicators and reports of potential military equipment deals with countries such as Saudi Arabia, Bangladesh, and Azerbaijan.
Market participation saw a 25% increase, with the average daily trading volume climbing to 1.6 billion shares from 1.3 billion the previous week. Investor sentiment was buoyed by productive meetings with China aimed at enhancing coordination at both bilateral and multilateral forums, particularly in relation to the China-Pakistan Economic Corridor (CPEC) phase II.
On the economic front, remittances for December 2025 were recorded at $3.6 billion, reflecting a 17% year-over-year increase. The total remittances for the first half of the fiscal year 2026 reached $19.7 billion, up 11% from the previous year. Additionally, the central government's debt decreased by 345 billion Pakistani Rupees during the first five months of the fiscal year 2026, totaling 77.5 trillion Rupees.
Treasury bill yields saw a decline in the first auction following decreasing inflation, with reductions of 29, 34, 32, and 33 basis points for one-month, three-month, six-month, and twelve-month papers, respectively. Cement offtakes grew by 1.5% year-over-year in December 2025 due to higher local dispatches.
The State Bank of Pakistan's foreign exchange reserves increased by $141 million week-over-week, ending at $16.1 billion as of January 2nd. The Pakistani Rupee appreciated by 0.03% against the US dollar, closing the week at 280.02 Rupees per dollar.
In other developments, the gas circular debt swelled to 3.2 trillion Rupees, prompting government considerations for a 5 Rupees per liter levy on motor spirit and diesel to aid the gas sector. The Oil and Gas Regulatory Authority moved to eliminate fixed returns in gas pricing, and Pakistan announced a reduction in the national average power tariff for calendar year 2026.
Sector performance varied, with transport, pharmaceuticals, insurance, refinery, and leather and tanneries leading the gains. Conversely, textile spinning, vanaspati and allied industries, jute, miscellaneous, and close-end mutual funds saw declines.
Mutual funds and companies were the primary net buyers, recording net purchases of $71.5 million and $35.5 million, respectively. Banks and foreign investors were the main sellers, with net sales of $56.3 million and $42.5 million, respectively.
Company-wise, the top performers included AICL, MCB, ABOT, HALEON, and SAZEW, while the top laggards were PSEL, SSOM, GHGL, DHPL, and ISL.