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CY26 buying, macros propel PSX further higher | The Express Tribune
Shares of 324 companies were traded. At the end of the day, 90 stocks closed higher, 211 declined and 23 remained unchanged. PHOTO: FILE
KARACHI:
Pakistan’s equity market opened the new year on a strong footing as the benchmark KSE-100 index extended its bullish momentum in the second week, climbing 5,375 points, or 3% week-on-week (WoW), to close at 184,410.
The rally was triggered by renewed buying in heavyweight stocks amid improved market participation, supportive macroeconomic indicators, and positive company-specific developments, while easing yields in the latest T-bill auction and robust remittances further strengthened investor sentiment. On a day-on-day basis, the bullish momentum at the Pakistan Stock Exchange (PSX) continued unabated on Monday as the KSE-100 index surged past 182k, closing at 182,408, up 3,373 points (+1.88%).
On Tuesday too, the market’s surge continued, when the index gained 2,654 points (+1.45%) to close at 185,602. The powerful and sustained bullish trend remained intact on Wednesday as well, with the bourse maintaining its full strength and closing at a fresh all-time high of 186,518. In the initial five sessions of CY26, the index added a massive 12,464 points (+7.2%).
However, following the sharp rally, the PSX witnessed its first profit-taking session on Thursday, where the index closed at 185,543, down 976 points (-0.52%). On Friday, the PSX took a breather and the KSE-100 remained volatile, swinging in both directions before closing at 184,410, down 1,133 points (-0.61%). Despite the decline, the CY26-to-date gains stood strong at 5.95%, equivalent to a rise of 10,356 points.
Arif Habib Limited’s (AHL) weekly report noted that the KSE-100 index climbed from 179,035 points last week to 184,410 in the outgoing week, gaining 5,375 points (+3%), supported by a rally in heavyweight stocks driven by new year buying, and positive company-specific news and updates.
Among economic developments, the government through a T-bill auction raised Rs979.3 billion against the target of Rs850 billion. Yields were down across all tenors by 28.6 to 33.8 basis points. Participation remained strong at Rs2,554.6 billion.
Worker remittances reached $3.6 billion in Dec’25, marking a 17% year-on-year (YoY) increase. Cumulatively, 1HFY26 remittances clocked in at $19.7 billion, up 11% YoY.
AHL mentioned that tariff rebasing, following shift from financial year to calendar year, was likely to pull the power purchase price down by Rs0.51 per kilowatt-hour (kWh) in CY26 versus FY26. Cotton arrivals in factories remained stable as of end-Dec’25. In Punjab, cotton arrivals declined 4% in CY25, while Sindh arrivals improved by 4% YoY. However, total production are estimated at 6.8 million bales in FY26, representing a significant 33% shortfall against projections.
Meanwhile, the central government debt stood at Rs77.5 trillion as of Nov’25 compared with Rs70.4 trillion in Nov’24, up 10.2% YoY and 0.7% month-on-month, AHL added.
JS Global’s Syed Danyal Hussain, in his report, said that the benchmark KSE-100 index extended its bullish run in the second week of the year, closing at 184,410, up 3% WoW. The rally was largely led by banks, which contributed 57% to index gains, while cement stocks (8%) and auto shares (5%) provided limited support. Market participation improved notably, with average daily traded volumes rising 25% WoW.
On the macro front, he said, Pakistan recorded monthly remittances of $3.6 billion in Dec’25, reflecting a 17% YoY increase. Meanwhile, total public debt declined by Rs345 billion to Rs77.5 trillion in 5MFY26, largely supported by the transfer of State Bank’s profits to the government.
In policy developments, the government was exploring options to seek relaxations from the IMF ahead of the FY27 budget, with key proposals including a phased reduction in super tax over the next four years and lower power tariffs to enhance competitiveness.
Separately, the gas-sector circular debt climbed to Rs3.2 trillion, driven mainly by a sharp rise in late payment surcharges (Rs1.45 trillion). In the T-bill auction, the government raised Rs979 billion against the target of Rs850 billion, with yields falling by 29-33 basis points across different tenors. SBP’s reserves rose $141 million to $16 billion.
The London Stock Exchange Group has unveiled plans for a £3 billion share buyback amid pressure from an activist investor and as artificial intelligence fears have hammered the stock.
LSEG said it would follow £2.1 billion in buybacks made last year with another £3 billion by February next year, on top of a hike in dividend payouts.
Details of the pledge to step up returns for investors came as it reported underlying operating profits of £3.51 billion for 2025, up 10.8% or 14.7% higher on a constant currency basis.
On a bottom line basis, pre-tax profits jumped 56.5% to £1.97 billion for 2025.
Shares in the group rose as much as 5% in Thursday morning trading, in a welcome increase after the stock has been battered in recent weeks by global investor concerns over the impact of AI on its firm and data companies more widely.
Shares in the firm, which makes a significant chunk of its earnings from selling access to markets data, have slumped by nearly a third in the past year.
Activist investor Elliott Management has also built up a stake in the firm earlier this month and has reportedly been pushing for more share buybacks as it has held talks with LSEG bosses.
In the face of the recent shares slump, chief executive David Schwimmer said recent results showed “another year of very strong financial performance”.
He said: “In the fourth quarter alone, major financial institutions signed long-term contracts worth £1.9 billion to access our leading data and workflow.”
“With our LSEG Everywhere data strategy, we are positioning ourselves as the partner of choice for licensed, trusted data as the use of AI in decision-making scales – and we are seeing very positive signs of adoption,” he added.
It outlined new performance guidance for 2027 to 2029, with aims to deliver “mid to high single digit” growth in total income and further increase profitability.
Despite taking a significant stake in LSEG, the Financial Times newspaper reported earlier this week that Elliott has made assurances to the UK government over its intentions for LSEG as speculation mounted it would look to push for a break-up of the firm or for it to switch its listing to New York.
Rolls-Royce has revealed its annual profit surged by £1 billion and upgraded its outlook for the years ahead, following major military aircraft orders and soaring demand for powering data centres.
The engineering giant said its business divisions were in a good place to benefit from “key global trends” over the coming years.
It reported an underlying operating profit of £3.5 billion for 2025, a jump of 40% from the £2.5 billion made the prior year.
Underlying revenues surpassed £20 billion over the year, up about a 10th on 2024.
This was driven by profit and sales growth across its civil aerospace, defence, and power businesses.
Rolls-Royce said demand for its defence products was strong and it secured major orders during 2025.
This included contracts worth more than £1.5 billion with the UK’s Ministry of Defence and the US’s Department of War for EJ200 and AE 2100 engines to power military aircraft.
New orders for the Eurofighter aircraft engines from Italy, Germany and Spain, as well as export agreements from Turkey, will drive production into the 2030s, it said.
Furthermore, Rolls-Royce said it was benefiting from growing demand for power generation, driven by data centres with revenues up by more than a third.
Rolls-Royce said it was now expecting underlying operating profits to increase to between £4.9 billion and £5.2 billion by 2028 following the strengthened financial performance in 2025.
This is significantly higher than the £3.6 billion to £3.9 billion range that it had previously been targeting.
Chief executive Tufan Erginbilgic said growth would not have been possible “before our transformation”, with the business making £600 million worth of cost savings since 2022.
“With our new capabilities and mindset, we have navigated challenges from supply chain to tariffs, and delivered a strong performance in 2025, all while we built the foundations for significant growth for years to come,” he said.
“Based on our 2026 guidance, we expect to deliver underlying operating profit within the prior mid-term guidance range two years earlier than planned.
“Beyond the mid-term we continue to see significant growth from existing businesses as well as from new business opportunities.”
Business
RBI’s Rs 25,000-Crore Switch Auction On March 2nd And Its Impact On Bond Markets, Government Debt Strategy | Explained
Last Updated:
RBI Switch Auction On March 2: The Reserve Bank of India will conduct a government securities switch auction worth Rs 25,000 crore on March 2 between 10:30 AM and 11:30 AM
In the latest exercise, all securities, having maturities in FY27, are being replaced with bonds maturing after FY32.
RBI Switch Auction On March 2: The Reserve Bank of India (RBI) will conduct a government securities switch auction worth Rs 25,000 crore on March 2 between 10:30 AM and 11:30 AM, with results to be declared the same day and settlement scheduled for March 4. The move marks the third such operation this month and is aimed at smoothing India’s future debt repayment profile.
What is a switch auction?
A switch auction is a debt management tool through which the government exchanges bonds that mature soon with bonds that mature later. Instead of repaying investors in cash when near-term securities mature, the government offers them longer-dated securities. This effectively postpones repayment obligations without increasing total debt.
In the latest exercise, all securities, having maturities in FY27, are being replaced with bonds maturing after FY32, according to RBI data.
Why is RBI conducting it now?
The key trigger is the heavy redemption pressure expected in FY27, when government securities worth about Rs 5.47 lakh crore are scheduled to mature. By replacing these with bonds maturing after FY32, the authorities are spreading repayment obligations across future years. This reduces refinancing risk and prevents sudden spikes in borrowing needs.
How does it help the government?
India has already budgeted gross market borrowing of Rs 17.2 lakh crore. Large redemptions in a single year would force the government either to borrow more or use fiscal resources for repayment. Switch auctions smooth this maturity profile, making debt servicing more predictable and fiscally manageable.
What has happened so far this month?
Before this latest announcement, the RBI conducted two switch auctions in which securities worth Rs 84,804 crore were bought back and replaced. The repeated use of this tool signals a proactive debt-management strategy rather than a reactive measure.
Why markets watch switch auctions closely
Bond investors track such operations because they affect liquidity, yield curves and supply of long-term securities. Extending maturities can reduce pressure on near-term yields while increasing supply at the long end, influencing pricing across the sovereign curve.
The broader takeaway
The latest switch auction is part of a deliberate strategy to manage India’s rising debt stock more efficiently. By pushing repayments further into the future and avoiding bunching of maturities, policymakers aim to maintain stability in government borrowing costs and ensure smoother fiscal operations in coming years.
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February 26, 2026, 11:11 IST
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