Cement: Lahore High Court announces 6% royalty decision against Cement Manufacturers - By Topline Research

Jun 16 2025

Topline Securities

• In a major development today, Lahore High Court larger bench has announced its decision against the Punjab based cement manufacturers regarding royalty case. The companies will have to pay the royalty amount at prescribed formula of 6% of retention price.

• Companies may go for appeal in Supreme Court now, however, this decision to go for review is not final yet from cement manufacturers.

• To recall that manufacturers based in Punjab were already provisioning for their raw material cost based on formula of 6% of retention price.

Economy: Middle East Conflict-Implications for PSX - By Chase Research

Jun 16 2025

• The conflict erupted after Israel launched surprise airstrikes on Iranian nuclear and military facilities, killing several high-ranking generals and nuclear experts.

• In retaliation, Iran fired over 150 ballistic missiles and more than 100 drones at Israel, targeting military sites and urban centers, in what it called "Operation True Promise III".

• Both sides have since traded escalating rounds of attacks: Israel has struck more than 250 targets in Iran, including nuclear development sites, missile launch facilities, energy infrastructure, and the Defense Ministry headquarters in Tehran.

Fauji Fertilizer Company Ltd. (FFC): FFC received board approval to submit EOI for PIACL privatization - By AKD Research

Jun 16 2025

AKD Securities

• Fauji Fertilizer Company Ltd. (FFC) has announced that its Board of Directors, in a meeting held on June 13, 2025, approved the submission of an Expression of Interest (EOI) and prequalification documents to Privatization Commission for the potential acquisition of stakes in Pakistan International Airlines Corporation Ltd. (PIACL) and undertaking a comprehensive due diligence exercise as part of the process.

• PIACL, the national flag carrier of Pakistan, holds the highest market share in the domestic aviation sector at 19% and operates fleet of 34 aircraft. In a major restructuring effort last year, gov’t carved out net liabilities amounting to PkR654bn and non-core assets into PIA Holding Company Ltd. (Holdco of PIACL), making PIACL a debt-lite entity. Notably, PIACL was EBITDA-positive in CY24, with a reported equity value of PkR3.6bn as of Dec’24.

• To recall, Privatization Commission had set a minimum bid price of PkR85bn in the previous privatization attempt. While, FFC has cash and ST investments worth PkR147bn on a standalone basis as of Mar’25.

Economy: MPS Preview: A Cautious Pause as Uncertainties Mount - By Pearl Research

Jun 16 2025

• The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) is expected to convene on 16 th June, 2025, wherein we expect the Committee to maintain the key policy rate unchanged at 11%.

• Our Monetary Policy Announcement History the view that the MPC will opt to hold the policy rate steady at 11% in its forthcoming meeting is predicated on a confluence of evolving global backdrop which may exert external pressure as well as erosion of offsetting base year effects.

• Persistent global economic policy uncertainty and geopolitical risks: Notably, the Global Economic Policy Uncertainty index escalated by 249% YoY in April 2025 amid heightened trade tensions due to uncertainty over tariff measures which can disrupt global supply chains, raise production costs, and delay investment flows, resulting in reemergence of price pressures in Pakistan. Compounding these challenges, the Middle East has witnessed a dangerous escalation in hostilities following Israel’s unprecedented strikes on Iran’s nuclear sites. Iran’s retaliatory launch, coupled with aggressive rhetoric from both sides has severely heightened regional risk, resulting in a surge in global crude prices. Given the dependence on imported oil, Pakistan external account remains highly vulnerable to sustained oil price volatility as Petroleum imports account for nearly 30% of total imports. Sustained escalation in geopolitical volatility can, therefore, result in depreciation of the PKR and escalation in the import bill which can inflate the CPI.

Economy: Pre-MPC Survey Results - By Chase Research

Jun 16 2025

• In anticipation of the SBP’s upcoming policy decision, Chase Securities conducted a short poll to gauge market sentiment on:

• A total of 34 participants provided their insights.

• We believe that these insights are key to identifying market sentiments and gauging the confidence in the equity market.

Technical Outlook: KSE-100; Short term correction looks completed - By JS Research

Jun 16 2025

JS Global Capital

• Bears dominated the session as the KSE-100 index closed the session at 122,144, down 1,950 points DoD. Volumes stood at 968mn shares compared to 1,025mn shares traded in the previous session. The index is expected to find support between 121,410 and 121,610 levels as a drop below targeting the 30-DMA at 117,222. However, any upside will face resistance in the range of 123,050-123,730 levels where a break above targeting recent high at 126,718. We recommend investors to stay cautious on the higher side and wait for dips. The support and resistance are at 121,479 and 122,932, respectively.

Morning News: Dar says steps under way to enhance financial ties with Turkiye - By WE Research

Jun 16 2025

• Pakistan is working to strengthen its economic partnership with Turkiye by enhancing cooperation in financial and logistics services, including plans to allow Turkish banks to operate in Pakistan and convening the 6th session of the Pakistan-Turkiye Joint Ministerial Commission. Turkiye has shown interest in investing in Pakistan’s Special Economic Zones (SEZs), prompting the development of a tailored investment package. Both nations aim to boost bilateral trade to $5 billion by 2025, up from the current $1.02 billion, with opportunities identified in Pakistan’s growing IT sector and healthcare projects like the Jinnah Medical Complex. Meanwhile, in the energy sector, the government has renegotiated contracts with several Independent Power Producers (IPPs), saving Rs3.612 trillion and reducing capacity costs. The circular debt remains a major challenge, amounting to Rs2,396 billion as of March 2025, with a Rs1.2 trillion refinancing package underway—funded by a debt service surcharge on electricity consumers—to stabilize the sector under the Circular Debt Management Plan.

• The Reko Diq Copper Project is emerging as a transformative force for Pakistan’s economy, with expectations of contributing nearly 1% to GDP annually and attracting $2.5 billion in private sector investment. Backed by a $700 million concessional financing package from the IFC and the World Bank— marking IFC’s first mining investment in Pakistan—the project signals renewed global confidence in the country's economic potential. Spearheaded by Reko Diq Mining Company (RDMC), and owned jointly by Barrick Gold Corporation (50%) and Pakistani stakeholders (50%), the mine holds one of the world’s largest untapped copper reserves, with a 40-year life span and anticipated annual output of 200,000– 250,000 tons. It promises up to $2 billion annually in gross value added, full foreign exchange revenue, and significant job creation—up to 10,000 during construction and 3,000 during operations. Alongside strict environmental and social standards, the project includes investments in local infrastructure, community development, and gender inclusion. However, logistical challenges remain, particularly for Pakistan Railways, which must upgrade transport links to ports. The project also highlights a historical failure in governance, having been delayed for decades due to poor decision-making and legal missteps.

Morning News: Pakistan set to hold policy rates - By Vector Research

Jun 16 2025

Vector Securities

• Central bank is expected to hold its policy rate on Monday, a Reuters poll showed, as many analysts shifted their previous view of a cut in the wake of Israel’s military strike on Iran, citing inflation risks from rising global commodity prices.

• Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial has said that the government has to obtain approval from International Monetary Fund (IMF) for every taxrelated proposal including any exemption, reduction in tax rates or any changes in tax regime.

• In a major leap for Pakistan’s economy, the Reko Diq Copper Project is set to contribute nearly 1 percent to the country’s GDP annually, positioning it as one of the most significant industrial ventures in country’s history. “Backed by latest major financing package from the International Finance Corporation (IFC)- including a US$300 million direct loan and US$400 million in blended finance - the project marks IFC’s first mining investment in Pakistan and signals renewed global confidence in the country’s economic potential,” said Dr Tauqir Shah, top aide to the prime minister. A media report claimed that as a result of this approval, the private sector is expected to invest $2.5 billion in the Reko Diq project. Dr Shah has played a key role in this achievement.

Oil Marketing Companies: Rising Oil Price impacts Import Bill Impact of Oil prices on Import Bill - By AHCML Research

Jun 13 2025

Al Habib Capital Markets

• With Israel’s military strike on Iran pushing Arab Light crude above USD 69/bbl as of June 13, 2025, Pakistan’s vulnerability to oil price shocks has intensified. In 10MFY25, the country imported USD 12.8 billion worth of petroleum products, up 3% YoY from the same period last year. Historically, for every USD 5 increase in oil prices, Pakistan’s import bill rises by approximately USD800mn- 1,000mn per year. If the conflict prolongs, the elevated oil prices could significantly strain the country’s trade balance and fiscal outlook.

• Pakistan’s external sector may soon face renewed pressure, as higher global oil and LNG prices directly impact the current account (CA). While the CA posted a USD 1.9 billion surplus in 10MFY25, this buffer could erode quickly if oil costs remain elevated. A deterioration into deficit territory could require additional financing from multilateral institutions, Saudi oil credit facilities, or bilateral loans. This may also complicate ongoing negotiations with the IMF, potentially diverting crucial funds away from development projects toward essential commodity imports.

Market Wrap: Highlights of the day - By JS Research

Jun 13 2025

JS Global Capital

• A highly volatile session was witnessed as the market opened on a negative note, in line with regional markets. Sentiment was hit due to escalating tensions between Iran and Israel, fueling investor caution. The index touched a low of 121,604 and closed at 122,143, down 1,950 points. Volatility persisted throughout the day amid uncertain global cues. Market volume stood at 968mn shares, with top activity in PASL, WTL, FCSC, PIAHCLA and BOP. We advise investors to adopt a cautious stance and avoid aggressive positions in the near term. Focus should remain on risk management and tracking geopolitical developments.