Pakistan’s capital market remained relatively stable in the third quarter of FY2025–26 despite severe global headwinds triggered by geopolitical tensions, rising oil prices, higher freight and insurance costs, and a broader risk-off environment, according to the Securities and Exchange Commission of Pakistan (SECP).
In its Quarterly Market Review for Q3 FY2025–26, the SECP analyzed equity market performance, investor participation, debt market activity, macroeconomic trends, global developments, and key regulatory reforms.
The report noted that the conflict led to a 10–13% surge in Brent crude oil prices in the early phase, while global equities came under pressure. US software stocks declined by around 23%, the S&P 500 fell 4.3%, MSCI Europe ex-UK dropped 3.2%, MSCI Asia slipped 1.1%, and MSCI Emerging Markets edged down 0.1%.
Against this backdrop, Pakistan’s KSE-100 index declined 14.54% during the quarter. However, the SECP said continued domestic investor participation, active primary market activity, and regulatory reforms helped maintain overall market stability.
The KSE-100 began 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%. Meanwhile, the KSE-All Share index fell 14.85%, and the KSE-30 index declined 15.52%.
Monthly performance showed volatility, with the index gaining 5.81% in January, declining 3.75% in February due to rising costs, geopolitical uncertainty, and profit-taking, and falling further by 11.50% in March.
Market capitalisation dropped from PKR 19.69 trillion to PKR 16.53 trillion, a decline of PKR 3.15 trillion. Despite this, trading activity remained robust, with total volume reaching 48.8 billion shares and total traded value at PKR 2.68 trillion. Average daily volume stood at 791.7 million shares, while average daily value was PKR 44.03 billion. On average, around 485 companies remained active per trading session.
Foreign investors recorded net outflows of PKR 111.61 billion, including PKR 117.07 billion in net selling by foreign corporates. However, domestic investors absorbed the selling pressure, with net buying of PKR 111.55 billion. Corporate investors led purchases with PKR 73.51 billion, followed by mutual funds at PKR 23.78 billion and individuals at PKR 20.25 billion.
Trading activity remained concentrated in blue-chip stocks. National Bank of Pakistan led in traded value at PKR 182.42 billion, followed by Pakistan Petroleum, OGDC, Fauji Fertilizer, and Habib Bank. In terms of volume, K-Electric led 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 size of PKR 800 billion. Total bids reached PKR 2.03 trillion, reflecting a bid-to-cover ratio of 2.54 times, while PKR 811.53 billion was accepted.
Secondary debt market activity also remained strong, with PKR 185.14 billion worth of Ijara Sukuk traded across 2,062 transactions. Activity in the PSX bills and bonds segment reached PKR 260.94 billion, while two privately placed corporate sukuk were also listed.
The 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.
