The Crossroads Empire: How Pakistan Flipped the Script

Tresmark: With every new piece of intel, the scale of India’s embarrassment is getting harder to hide. What was initially brushed off as a routine border skirmish now looks like a high-precision rout.

And while New Delhi retreats into strategic silence, Pakistan walks away with something priceless: renewed internal confidence, global attention, and leverage that speaks louder than any press release.

Support from Strategic Allies
Pakistan received robust backing from China, Turkey, the GCC, and NATO states. Ankara’s rapid support package—consisting of drones and radar systems—was quietly acknowledged in GHQ circles as a timely and trusted intervention, and its presence didn’t go unnoticed by the world. Global powers remain vested in Pakistan’s stability—both economically and diplomatically. This has positioned Pakistan as a strategic frontier market with significant upside potential.

This multinational coordination has left the world in awe of how swiftly Pakistan flipped the script—militarily and diplomatically.

Pakistan: The Cradle of Great Power Crossroads
Pakistan today stands at a rare geopolitical intersection—an indispensable node within the Chinese bloc, while remaining a relevant, if complex, partner in the American-led global order. It’s the only country that simultaneously hosts China’s flagship CPEC projects, receives Turkish drones and Gulf funding, and still leans on IMF programs orchestrated via Washington.

This duality isn’t a contradiction—it’s a tightrope. If played wisely, it allows Pakistan to extract trade, aid, and influence from both camps. But a misstep could mean alienating both—and slipping into strategic irrelevance.

Few nations occupy such a delicate yet potentially powerful position. The cradle of this crossroads could well be Pakistan’s reincarnation.

Markets Deliver Strong Returns
– Equities rock: The Karachi Stock Exchange (KSE) has rallied sharply—multiplying from 3.8x earnings two years ago to 6x, and is now poised to break the 125,000 barrier before this fiscal ends.
– Reserves Surge: Forex reserves, which were under $10 billion two years ago, have now crossed $16 billion.
– Eurobond Rally: Sovereign bonds that traded below 40 cents on the dollar in 2023 have now doubled in value.
– Currency Stability: The Rupee has traded within a narrow 3% band over the last two years—remarkable by any measure.
– Valuation Still Attractive: Despite the rally, KSE stocks still trade at a modest 6x forward earnings—offering a meaningful discount to the MSCI Emerging Markets Index.

Another Rate Cut on the Cards?
Bond markets are rallying, with yields on 6-month and 10-year paper falling by 75 bps and 25 bps respectively—suggesting that markets are pricing in a 50–100 bps rate cut. The only real vulnerability lies in the external position, but with the Rupee consolidating around the 282/$ level, a 100 bps cut seems more likely. This already factors in a modest uptick in inflation expectations.

Rupee Holding Ground
With payments pressure easing, the Rupee held its range last week. While markets are rife with rumours of an imminent depreciation, there’s little fundamental justification for it. Even open market rates have stabilised.

USD/PKR
• 1 Week: 282
• 1 Month: 283
• 1 Quarter: 285
EUR/USD
• 1 Week: 1.1346 (Neutral)
• 1 Month: 1.1240 (Bearish)
• 1 Quarter: 1.1356 (Neutral)
GBP/USD
• 1 Week: 1.3474 (Bearish)
• 1 Month: 1.3276 (Bearish)
• 1 Quarter: 1.3344 (Bearish)
USD/JPY
• 1 Week: 143.02 (Bearish)
• 1 Month: 144.34 (Sideways)
• 1 Quarter: 141.57 (Bearish)
Oil WTI
• 1 Week: 61.62 (Bullish)
• 1 Month: 64.60 (Bullish)
• 1 Quarter: 64.12 (Bullish)
Gold
• 1 Week: 3305 (Sideways)
• 1 Month: 3206.71 (Bearish)
• 1 Quarter: 3284.29 (Bullish)