No Market Breakdown Seen Despite PSX Decline During US-Iran War: SECP

Pakistan’s capital market remained relatively stable in the third quarter of FY2025–26 despite strong global headwinds driven by geopolitical tensions, rising oil prices, higher freight and insurance costs, and a broader risk-off sentiment, according to the Securities and Exchange Commission of Pakistan (SECP).

In its Quarterly Market Review for Q3 FY2025–26, the SECP assessed equity market performance, investor activity, debt market trends, macroeconomic indicators, global developments, and regulatory reforms.

The report noted that the war pushed Brent crude oil prices up by 10–13 percent in the early phase, while global equities came under pressure. US software stocks declined by around 23 percent. The S&P 500 fell 4.3 percent, MSCI Europe ex-UK dropped 3.2 percent, MSCI Asia slipped 1.1 percent, and MSCI Emerging Markets eased 0.1 percent.

Against this backdrop, Pakistan’s KSE-100 index declined 14.54 percent during the quarter. However, the SECP said strong domestic investor participation, active primary market activity, and regulatory reforms helped support overall market stability.

The KSE-100 started the quarter at 174,054 points, reached a high of 191,033 on January 26, and closed at 148,743 on March 31. The intra-quarter low was recorded at 144,119 on March 19, reflecting a peak-to-trough decline of 22.57 percent. The KSE All Share index fell 14.85 percent, while the KSE-30 index declined 15.52 percent.

Monthly performance showed volatility. The index gained 5.81 percent in January, fell 3.75 percent in February amid rising costs, geopolitical risks, and profit-taking, and declined further by 11.50 percent in March.

Market capitalisation dropped from Rs. 19.69 trillion to Rs. 16.53 trillion, a decline of Rs. 3.15 trillion. Despite this, trading activity remained strong, with total volume reaching 48.8 billion shares and total traded value at Rs. 2.68 trillion. Average daily volume stood at 791.7 million shares, while average daily value was Rs. 44.03 billion. Around 485 symbols remained active per session, indicating broad participation.

Foreign investors recorded net outflows of Rs. 111.61 billion, including Rs. 117.07 billion in net selling by foreign corporates. Domestic investors absorbed the selling pressure, posting net buying of Rs. 111.55 billion. Corporate investors led with Rs. 73.51 billion in net purchases, followed by mutual funds at Rs. 23.78 billion and individuals at Rs. 20.25 billion.

Trading remained concentrated in blue-chip stocks. National Bank of Pakistan led with Rs. 182.42 billion in traded value, followed by Pakistan Petroleum, OGDC, Fauji Fertilizer, and Habib Bank. In terms of volume, K-Electric topped the list with 4.64 billion shares, followed by Bank of Punjab and WorldCall Telecom.

Primary market activity remained active, with the SECP approving three IPOs during the quarter. On the debt side, three Government of Pakistan Ijara Sukuk auctions were conducted with a target of Rs. 800 billion. Bids reached Rs. 2.03 trillion, reflecting a bid-to-cover ratio of 2.54 times, while Rs. 811.53 billion was accepted.

Secondary debt market activity also remained strong, with Rs. 185.14 billion worth of Ijara Sukuk traded across 2,062 transactions. Activity in the PSX bills and bonds segment reached Rs. 260.94 billion, while two privately placed corporate sukuk were also listed.

SECP described the quarter as challenging but noted that the market demonstrated resilience under pressure. Strong domestic participation, active debt and primary markets, and ongoing regulatory reforms supported overall stability, indicating improving fundamentals and sustained investor confidence in Pakistan’s capital market.