Key Points
- Corporate earnings rising to 20 per cent strengthened the overall equity gains
- Expansion supported by increased liquidity and higher trading activity
- Capital market deepening reflected through improved investor participation
ISLAMABAD: Pakistan’s capital market posted notable gains during 11 months of the outgoing fiscal year, supported by strong equity performance and improving corporate earnings, according to the Economic Survey 2025-26 released on Thursday.
The survey showed that market capitalisation expanded significantly over the period, reflecting sustained investor confidence, improved macroeconomic conditions and better corporate profitability across key listed sectors.
The benchmark stock index also recorded strong gains during the same period, indicating broad-based participation in the equity market and renewed interest from both domestic and institutional investors.
The Economic Survey highlighted that the capital market’s performance was underpinned by easing inflationary pressures, relative exchange rate stability and expectations of policy continuity, which collectively strengthened risk appetite in equities.
Listed companies across major sectors, including banking, energy, fertiliser and cement, contributed to improved market sentiment as corporate earnings showed resilience amid evolving economic conditions.
The survey added that capital market deepening continued through new listings and broader investor participation, further supporting liquidity and valuation growth during the period.
Overall, the report described the 11-month performance as a phase of sustained recovery and consolidation for Pakistan’s equity market, with corporate sector strength playing a central role in driving gains.
Over the past five years, Pakistan’s benchmark stock index has experienced pronounced volatility, reflecting shifting macroeconomic and financial conditions.
The index recorded a decline of around 30pc during periods of economic stress marked by external account pressures, high inflation and policy tightening.
This was followed by a recovery phase in which the index rebounded by more than 40pc, supported by improved investor sentiment, relative macroeconomic stabilisation and expectations of policy continuity.
Despite cyclical swings, the overall trend reflects episodic corrections followed by sharp recoveries, characteristic of an emerging market equity landscape.
