PSX to Hit 109,000 Level By June 2025: Report

The successful achievement of a staff-level agreement with the International Monetary Fund (IMF) will push the Pakistan Stock Exchange (PSX) index to 109,000 by June 2025, according to a report by Arif Habib Limited (AHL). AHL said the new bailout program will be beneficial for the markets as it offers a clear direction for economic policies and allows investors to make informed decisions based on the outlined framework. Moreover, with respect to sectoral impacts, the report analyzes that energy being one of the top priorities of the IMF, would be beneficial for E&P, OGMCs, and the Power sector particularly. The report forecasts that the sectors with low utilization including Cements, Autos, Steel, and Pharma, amid low economic growth would take a sigh of relief. Thus, utilization and profitability levels of these sectors are expected to improve. The report’s index target for June 2025 is 109,000, implying an upside potential of 36 percent from current levels. KSE-100 is currently trading at a PER of 4.2x (2025) compared to the last five-year average PE of 6.0x while offering a dividend yield of ~10 percent. The report’s preferred stocks are OGDC, PPL, MCB, UBL, MEBL, LUCK, FCCL, DGKC, MLCF, FFC, FFBL, PSO, HUBC, ILP, NML, and INDU. AHL said the new IMF program will create a favorable environment for financial inflows from other multilateral institutions, bilateral partners, and friendly countries. These inflows are expected to contribute to an increase in the country’s foreign exchange (FX) reserves and help alleviate any external pressures. Additionally, the program will provide much-needed clarity and certainty regarding the economic roadmap alongside structural reforms for the next three years.