Karachi: AKD Securities Limited has released its unaudited financial statements for the quarter ending September 30, 2026, highlighting both economic resilience and challenges in Pakistan amidst ongoing geopolitical tensions. The report, dated October 30, 2026, reflects on the country's macroeconomic conditions, stock market performance, and commodity price fluctuations.
During the first quarter of the fiscal year 2027, Pakistan's economy demonstrated signs of recovery from macroeconomic stabilization, despite regional conflicts affecting the Red Sea. This period saw a gradual increase in industrial output, with large-scale manufacturing (LSM) growing by 1.9% year-over-year (YoY), supported by the manufacturing of wearing apparel, automobiles, and refinery output. Cement and fertilizer sales experienced an 8% YoY increase, driven by government schemes and dealer financing. The automobile sector also reported a 22% YoY surge in sales, attributed to lower interest rates and improved vehicle availability.
On the equity market front, the KSE100 index faced downward pressure, recording a 5.7% quarter-on-quarter decline. Market liquidity was strained as the average trading volume fell by 14.9% YoY to 1,001 million shares, and traded value decreased by 22.31% YoY. Refineries were the standout sector with a 62.9% quarterly return. Conversely, sectors such as Power, Textiles, and Pharmaceuticals posted negative returns of 18.1%, 15.3%, and 12.4% respectively, due to supply chain disruptions.
Investor behavior reflected cautious optimism. Individuals increased their exposure by $92.8 million, while companies and non-banking financial companies (NBFCs) added $25.4 million and $1.2 million respectively. However, mutual funds reduced their exposure by $64.2 million amidst rising interest rates, contributing to a net outflow of $116.8 million from mutual funds, banks, brokers, and insurance. Foreign investors also pulled back, decreasing their exposure by $3.4 million.
According to information available from the Pakistan Stock Exchange (PSX), the market faced a significant move, with some sectors displaying notable fluctuations amid the geopolitical tensions. The power sector recorded a big move with an 18.1% decline, while the textile sector faced a significant move with a 15.3% drop. Refineries, however, experienced a very large move with a dramatic 62.9% increase.
In the debt and currency markets, the State Bank of Pakistan (SBP) maintained the policy rate at 11.5%, managing external account pressures through robust remittances and financial inflows. The current account deficit remained stable, supported by a $3.0 billion Eurobond issuance that boosted foreign exchange reserves. The money supply contracted by 1.6% during the quarter, with a notable increase in net foreign assets.
Commodity prices surged significantly in response to geopolitical hostilities, with crude oil prices rising due to disruptions in the Strait of Hormuz and Yemeni drone strikes. Brent and WTI crude prices increased by 54% and 45% YoY, respectively. Precious metals, industrial metals, and staple food prices also climbed as investors sought safe-haven assets and supply chain constraints intensified.
Overall, the AKD Securities report underscores the complex interplay of economic recovery and geopolitical challenges, influencing market dynamics in Pakistan. As the country navigates these conditions, investor sentiment and strategic adjustments remain pivotal in shaping market outcomes.