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Policymakers cannot afford sudden shocks
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Interest rates may come down slowly, not sharply
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Subsidy-heavy or import-dependent sectors remain exposed
High Rates Are Still the Anchor
Even if the interest rate cycle turns marginally accommodative, Pakistan remains a high real-rate economy by global standards. This has two direct effects on equities:
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Valuation multiples remain capped
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Leverage becomes a silent risk amplifier
This environment naturally shifts capital preference away from speculative growth toward durable cash generators.
Why Capital Preservation Becomes the Dominant Theme
Markets are not driven by optimism alone; they are driven by risk-adjusted survival.
In a capital-preservation phase, investors prioritize:
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Predictable operating cash flows
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Dividend sustainability
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Policy visibility
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Balance-sheet strength
This does not mean equities stop performing. It means performance becomes selective, and broad-based rallies become rare.
