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 an overall risk-off sentiment, according to the Securities and Exchange Commission of Pakistan (SECP). In its Quarterly Market Review, the regulator assessed equity market performance, investor activity, debt market trends, macroeconomic conditions, and ongoing regulatory reforms, highlighting both external pressures and domestic resilience during the period.
The report noted that global markets came under significant stress during the quarter, with Brent crude oil prices rising by 10–13% in the early phase of the conflict and major equity indices recording losses. US software stocks declined by around 23%, while 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%, reflecting global spillovers as well as domestic economic pressures, though strong local participation and regulatory support helped prevent deeper instability.
The KSE-100 index started the quarter at 174,054 points, reached a high of 191,033 on January 26, and closed at 148,743 on March 31, with an intra-quarter low of 144,119 recorded on March 19, marking a peak-to-trough decline of 22.57%. The KSE All Share index fell 14.85%, while the KSE-30 index declined 15.52%. Monthly performance showed volatility, with a 5.81% gain in January, a 3.75% decline in February due to rising costs and geopolitical uncertainty, and a sharper 11.50% fall in March driven by profit-taking and continued pressure.
Market capitalization dropped from Rs. 19.69 trillion to Rs. 16.53 trillion, reflecting a decline of Rs. 3.15 trillion. Despite this contraction, trading activity remained strong, with total volume reaching 48.8 billion shares and total traded value recorded at Rs. 2.68 trillion. Average daily volume stood at 791.7 million shares, while average daily value reached Rs. 44.03 billion, with around 485 symbols actively traded per session, indicating broad market participation.
Foreign investors recorded net outflows of Rs. 111.61 billion, primarily driven by Rs. 117.07 billion in selling by foreign corporates, while domestic investors absorbed the pressure with net buying of Rs. 111.55 billion. Corporate investors led domestic inflows with Rs. 73.51 billion, followed by mutual funds at Rs. 23.78 billion and individual investors at Rs. 20.25 billion, reflecting strong local confidence in the market despite volatility.
Trading activity remained concentrated in blue-chip stocks, with National Bank of Pakistan leading at Rs. 182.42 billion in traded value, followed by Pakistan Petroleum, OGDC, Fauji Fertilizer, and Habib Bank. In terms of volume, K-Electric dominated with 4.64 billion shares, followed by Bank of Punjab and WorldCall Telecom. On the primary market side, the SECP approved three IPOs during the quarter, while the debt market remained active with three Government of Pakistan Ijara Sukuk auctions targeting Rs. 800 billion and receiving bids worth Rs. 2.03 trillion, reflecting a strong bid-to-cover ratio of 2.54 times.
Secondary debt market activity also remained robust, with Rs. 185.14 billion in Ijara Sukuk traded across 2,062 transactions, while PSX bills and bonds activity reached Rs. 260.94 billion. Two privately placed corporate sukuk were also listed during the period. Overall, despite global volatility and domestic market corrections, the SECP described the quarter as challenging but resilient, supported by strong domestic investor participation, active capital market activity, and continued regulatory reforms that helped maintain overall stability and investor confidence.
