Morning News: Debt stocks hit Rs70.37trn mark by Nov-end – By Vector Research

Jan 7 2025


Vector Securities


  • The federal government’s total debt stocks reached Rs 70.37 trillion mark by the end of November 2024, primarily driven by ongoing borrowing to cover the fiscal deficit, according to the latest report from the State Bank of Pakistan (SBP).
  • The total government domestic debt and liabilities have increased by 17.71% to around Rs49 trillion in November 2024, compared to Rs41.53tr in the same period last year, the latest data released by the State Bank of Pakistan (SBP) showed. On a sequential basis, domestic debt and liabilities increased by 2.85% compared to Rs47.53tr in the same month last year.
  • Inflation has come down sharply, but is expected to remain volatile and increase in the remaining two quarters of current fiscal year as well as in the first quarter of next fiscal year on account of base effect and expected increase in energy prices. The governor also informed that in view of encouraging trends, easing financial conditions and improving external position, SBP projects real GDP growth in the range of 2.5 percent to 3.5 percent for fiscal year 2025.

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AirLink Communication Ltd ((AIRLINK): Innovation unplugged - By Foundation Research

May 27 2025


Foundation Securities


  • We initiate coverage on AirLink Communication Ltd. with an ‘Outperform’ rating and a Dec’25 TP of PKR 273.3/sh, implying a 67.8% upside. AIRLINK has established a strong position in the mobile manufacturing market through the local assembly of prominent brands including Xiaomi, Tecno, and Itel. The company has ambitious plans to expand its product portfolio further by venturing into the manufacturing of laptops, TV’s and EV’s.
  • Our positive outlook on AIRLINK is supported by (1) increasing broadband and smartphone penetration in Pakistan, (2) strategic expansion aided by a 10-year tax holiday, (3) rising market share of low budget smartphones, (4) diversification into laptops and TVs, (5) potential in Xiaomi smartphone exports, and (6) expanding horizons with EV’s. Despite growing competition, the company’s forward looking initiatives position it strongly to capitalize on untapped market opportunities.
  • Increasing broadband and smartphone penetration: Pakistan’s smartphone penetration (31%) is significantly lower than in neighboring India (47%) and other developing countries (avg: 54%) with a GDP per capita close to Pakistan’s. Similarly, smartphone penetration in South-East Asia stood at 79% in 2024, highlighting the gap and growth opportunity in Pakistan. Improved internet access and evolving popularity of social apps coupled with digitalization are likely to keep demand for smartphones robust in the near term.
Pakistan Economy: May-25 CPI likely at 2.7%, base effect wears off - By JS Research

May 27 2025


JS Global Capital


  • Pakistan's Consumer Price Index (CPI) is expected to clock in at 2.7% for May-2025. The base effect is now fading, signalling a return to normalized price trends. This is likely to take 11MFY25 average inflation to 4.7%, down from 11MFY24 average of 24.9%.
  • Due to the rapid disinflation during the year, our base case CPI forecast for FY25 averages 4.6%. The rolling 12-month forward CPI estimate stands at around 5.7%.
  • State Bank of Pakistan (SBP) reduced policy rate to 11% in the last MPC meeting, owing to rapidly declining inflation. A further rate cut of 50-100bps cannot be ruled out in the near future. SBP is scheduled next to meet on 16th June 2025 for its Monetary Policy Committee (MPC) meeting.
Morning News: IMF in disagreement over key targets, subsidies - By Vector Research

May 27 2025


Vector Securities


  • The Finance Ministry said on Monday that the presentation of the Federal Budget 2025-26 has been delayed from June 2 to June 10 due to disagreements with the International Monetary Fund (IMF) over key budgetary figures, including subsidy allocations.
  • Prime Minister Muhammad Shehbaz Sharif said that the bilateral trade between Pakistan and Iran which stood at $3billion would be taken to $10 billion volume in the next few years, as there was immense potential of growth. Prime Minister Shehbaz Sharif on Monday departed to Iran after concluding his two-day official visit to Turkiye.
  • Despite projected remittance inflows of $38 billion in the current fiscal year (FY25), Pakistan’s per expatriate remittance remains significantly lower than that of peer countries. “Although remittances have grown at a compound annual rate of 6.1 per cent from 2013 to 2023, per expatriate remittance remains low in comparison to other countries in the region,” said a report released by the Policy Research and Advisory Council (PRAC) on Monday.
Morning News: Budget features bold measures for ‘strategic direction - By HMFS Research

May 27 2025


HMFS Research


  • Finance Minister Muhammad Aurangzeb on Monday pledged that the upcoming federal budget would introduce “bold measures” to steer the national economy in a strategic direction and make available whatever support is required by the armed forces. Further said that every possible support would be provided to the armed forces, stressing that it was a national need in light of recent cross-border aggression, not just a military requirement. He said the government would ensure simplified tax returns and forms for the salaried class. He said that around 70 to 80 percent of salaried people did not hold equity and fixed-income portfolios. “They receive salaries through bank accounts with tax deducted at source. They should not have to fill in 140-150 data points,” he said, adding that the government aimed to reduce that number to just nine — five for wealth tax and four for income tax. He said the process would now be accelerated, with transactions involving Pakistan International Airlines (PIA), three power distribution companies and some financial institutions expected to reach completion by the end of this year.
  • The Finance Ministry said on Monday that the presentation of the Federal Budget 2025-26 has been delayed from June 2 to June 10 due to disagreements with the International Monetary Fund (IMF) over key budgetary figures, including subsidy allocations. “The budget announcement has been delayed by a week because the Finance Ministry’s figures are still under reconciliation. The IMF has placed a cap on subsidies,” he added. He further noted that the IMF has declined to make any changes to the revised budget figures recently presented to the Fund’s team.
  • The government is seriously considering reducing federal excise duty (FED) on beverages (aerated water) in the coming budget (2025-26) to attract foreign investment in this sector. Foreign investors including Turkish investors have promised more foreign direct investment in beverage sector in case of tax relief in the coming budget (2025-26). Leading global players with Turkish and Korean franchise investors have invested over USD 2 billion in Pakistan since 2018. However, no new investments have been made since 2023 due to the current fiscal environment. The industry contributes over Rs 175 billion in taxes annually (FED, GST, income tax, super tax) - one of the highest taxed sectors.
K-Electric (KEL): Transmission and Distribution Tariff Unveiled All three businesses now will get USD tariff - By Topline Research

May 26 2025


Topline Securities


  • In Seven months after securing dollarized tariff for generation business, the K-Electric (KEL) has also secured dollarized tariff for its transmission and distribution business for 7 years, i.e. from FY24 to FY30.
  • Distribution Business awarded USD ROE of 14%: NEPRA has awarded USD IRR of 14% to KEL for distribution business against requested USD IRR of 16.67%. The USD IRR of 14% translates into PKR ROE of 25.6% for Y1 (i.e. FY24). Which is better than previous tariff PKR return of 16.67%.
  • Transmission Business awarded USD ROE of 12%: NEPRA has awarded USD IRR of 12% to KEL for transmission business against requested USD IRR of 15%. The USD IRR of 12% translates into PKR ROE of 21.4% for Y1 (i.e. FY24). Which is better than previous tariff PKR return of 15%
Market Wrap: Highlights of the day May 26, 2025 - By JS Research

May 26 2025


JS Global Capital


  • The KSE-100 Index fell 0.8% to an intraday low of 118,150, as investor sentiment weakened due to the government's delay in presenting the federal budget and ongoing uncertainty surrounding IMF fiscal targets. The postponement of Budget 2025–26 and unresolved negotiations with the IMF are driving the risk-off behavior. Market direction remains contingent on clarity from upcoming IMF discussions and the budget announcement; volatility is likely to persist until fiscal policy details are finalized.
Pakistan Economy: OPEC’s aggressive output hike puts Pakistan in a sweet spot - By Insight Research

May 26 2025


Insight Securities


  • OPEC+ is expected to announce another output hike of 411 k bbl/day starting July, according to multiple news reports . During the group’s upcoming meeting on June 1st, members are likely to approve a production increase that is three times larger than the previously planned hike of 137 k bbl/day . If materialized, this move could add pressure to already struggling international crude oil prices, which have been weighed down by a weak global economic outlook.
  • Sources close to the group indicate that larger -than -expected output hike may be part of a broader strategy to bring as much as 2 . 2mn bbl/day back into the market by Nov’25 . The decision is widely seen as an effort, particularly by Saudi Arabia to regain lost market share and push high cost producers out of the market . Notably, Saudi Arabia’s market share has been on a declining trend since 2022 , following OPEC+ production cuts that reduced the cartel’s overall share in global oil supply . KSA’s market share declined even faster than the group’s average . The current strategy also appears to target non -compliant OPEC+ members, with Saudi Arabia leveraging its cost advantage to reclaim share from both shale producers and cartel members who are not adhering to quotas . Additionally, experts suggest a geopolitical angle to the move, particularly in the context of U . S . -Saudi relations . The Trump administration is reportedly keen on lower oil prices to curb inflation and restore market confidence especially due to tariff-induced uncertainty . On the other hand, Saudi Arabia is seeking deeper defense cooperation and has recently announced plans to invest US $600bn in US .
  • We believe that Saudi Arabia aims to capture market share from high -cost producers while maintaining some degree of control on prices through monthly OPEC+ meetings, as highlighted in group’s recent press releases . A sharp price decline would not be in KSA’s interest, especially considering its ambitious development plan .
Pakistan Economy: National Consumer Price Index (NCPI) - By AHCML Research

May 26 2025


Al Habib Capital Markets


  • Inflation in May’25 is expected to clock in at 3.0% YoY, up from 0.3% in Apr’25 and down from 11.8% in May’24, as base effects continue to fade. On a monthly basis, CPI is likely to decline by 0.6% MoM, posting the second consecutive drop, mainly due to a 2.3% fall in food prices amid improved supply of perishables. However, poultry shortages are expected to push egg and chicken prices up by 32.8% and 20.7% MoM, respectively.
  • The transport index is expected to decline by 0.7% MoM due to lower fuel prices, while the clothing and footwear index is projected to rise by 1.2% MoM.
  • On a YoY basis, food inflation is anticipated to ease to 0.9%, but non-food inflation is likely to remain elevated, led by healthcare (+12.5%), education (+10.4%), clothing (+9.9%), and restaurants (+8.4%).
K-Electric (KEL): NEPRA approves Multi-Year T&D Tariff for K-Electric - By Taurus Research

May 26 2025


Taurus Securities


  • NEPRA has approved Multi-Year Tariff for Transmission & Distribution (T&D) network segments of K-Electric for FY24- FY30. Salient features of the multi-year tariff approved by NEPRA are as follows:
  • Control Period: 7 Years, from FY24- FY30.
  • Allowed Debt-to-Equity Ratio: 70:30.
Pak Aluminium Beverage Cans Ltd (PABC): Exports outlook gets weaker; Reiterate Sell - By JS Research

May 26 2025


JS Global Capital


  • We tweak down our CY25E/CY26E EPS estimates for Pak Aluminium Beverage Cans Ltd (PABC) by 9% and TP by 4%. The revision is mainly led by the expected fall in volumes led by border issues with Afghanistan coupled with the upcoming capacity expansions in Central Asia, which may adversely impact PABC’s export prospects to the region. We reiterate our Underperform rating for the stock with a TP of Rs110.
  • Furthermore, any reduction in regulatory duty in the upcoming budget (from 22%-26% currently to 15% or less) given to the local industry, may create pressure on sales volumes from dumping of cheaper products in the country.
  • We consider resumption of dividend payout and announcement of any Capex or investment plan as key triggers for the stock going forward. To highlight, PABC stands at net cash position of Rs10.7bn (Mar-2025).
Morning News: IMF in disagreement over key targets, subsidies - By Vector Research

May 27 2025


Vector Securities


  • The Finance Ministry said on Monday that the presentation of the Federal Budget 2025-26 has been delayed from June 2 to June 10 due to disagreements with the International Monetary Fund (IMF) over key budgetary figures, including subsidy allocations.
  • Prime Minister Muhammad Shehbaz Sharif said that the bilateral trade between Pakistan and Iran which stood at $3billion would be taken to $10 billion volume in the next few years, as there was immense potential of growth. Prime Minister Shehbaz Sharif on Monday departed to Iran after concluding his two-day official visit to Turkiye.
  • Despite projected remittance inflows of $38 billion in the current fiscal year (FY25), Pakistan’s per expatriate remittance remains significantly lower than that of peer countries. “Although remittances have grown at a compound annual rate of 6.1 per cent from 2013 to 2023, per expatriate remittance remains low in comparison to other countries in the region,” said a report released by the Policy Research and Advisory Council (PRAC) on Monday.
Morning News: IMF not too ‘keen’ on relief steps in budget, links them to FBR revenue - By Vector Research

May 23 2025


Vector Securities


  • Signaling its reluctance to grant a major relief to the salaried, property, beverage, and export sectors, the visiting IMF team has linked the FBR’s tax collection target with reduction in expenditures. This is the crux of the ongoing parleys, as the team is going to accomplish its visit on Friday (today). However, the Fund will make an exception for the defence budget, as Islamabad will take an appropriate decision to hike the defence spending in view of the current geopolitical environment.
  • Prime Minister Shehbaz Sharif on Thursday met with a delegation from the World Bank, led by Managing Director of Operations Anna Bjerde, to discuss the Bank’s development investment and cooperation in Pakistan. The prime minister said the government is taking practical steps to maximize benefits from the World Bank’s investment under the Country Partnership Framework. He said the framework is expected to bring more than $20 billion in development financing to Pakistan.
  • Federal Minister for Power Sardar Awais Ahmad Khan Leghari met with a delegation led by Anna Bjerde, Managing Director Operations of the World Bank, to discuss Pakistan's ongoing power sector reforms. According to a press statement issued on Thursday, the minister shared plans to launch a competitive electricity market soon, noting that preparatory work is underway. An Independent System and Market Operator (ISMO) has been established, and experienced professionals are being appointed. The government will no longer be the sole electricity purchaser.
Morning News: IMF yet to decide on budget relief request - By Vector Research

May 22 2025


Vector Securities


  • Seeking effective and practical steps for the realisation of agriculture income tax and improvements in retail sector taxation, the International Monetary Fund (IMF) has yet to take a position on Pakistan’s request for relief measures in the upcoming budget, due on June 2.
  • Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb said that Pakistan’s exports to United States of America (USA) is $4.4 billion as compared to imports of US$1.9 billion with the trade surplus of $2.5 billion during current Financial Year 2024-25 (up to March).
  • Pakistan’s total investment plunged into the lowest range despite a slight improvement in the outgoing fiscal year 2024-25, mainly due to the assumption of reliance on increased public investments. Private sector investment stagnated, standing at 9.1 percent in the current fiscal year compared to 9 percent in the last financial year.
Morning News: Q3FY25; Economy posts 2.4pc growth - By Vector Research

May 21 2025


Vector Securities


  • Pakistan’s economy recorded a 2.4 percent growth in the third quarter (January– March) of fiscal year 2024–25, as reported by the Pakistan Bureau of Statistics (PBS) on Tuesday. Despite a 1.14 percent contraction in the industrial sector during the third quarter (January–March) of fiscal year 2024–25, Pakistan’s economy achieved a 2.4 per cent GDP growth, according to the PBS following the 113th National Accounts Committee (NAC) meeting.
  • The World Bank (WB) has deferred the approval of additional International Development Association (IDA) credit in the equivalent amount of $70 million to Pakistan Raises Revenue (PRR) project, which was aimed at providing additional investment financing to the Federal Board of Revenue (FBR), in support of its new Transformation Plan, official sources revealed.
  • The Petroleum Division (PD) has sent a summary to the Cabinet Committee for Disposal of Legislative Cases (CCLC), seeking carbon levy of Rs2.50 per litre on petrol, diesel and furnace oil by June end for budgetary year FY26. The carbon levy will be hiked to Rs5 per litre on POL products in FY27.
Morning News: Pakistan, IMF open talks on budget finalization - By Vector Research

May 20 2025


Vector Securities


  • Pakistan and the International Monetary Fund (IMF) opened high-level policy talks in Islamabad on Monday to discuss the upcoming federal budget for fiscal year 2025-26, officials said. The current round of discussions, which will continue till May 23. The Islamabad talks focus on revenue targets, expenditure controls, and budgetary projections as Pakistan grapples with mounting fiscal and external financing pressures. An agreement between the IMF staff mission and the authorities on next year’s budgetary measures and macroeconomic framework would lead to the announcement of the federal budget on June 2.
  • The International Monetary Fund has tightened the loan conditions for Pakistan for future funding, and warned of risks to the South Asian nation’s economy from US President Donald Trump’s tariff policies and escalating tensions with India, reports Bloomberg.
  • Pakistan is seeking loans totalling up to $350 million from commercial banks in the United Arab Emirates to meet its external financing needs. According to informed banking sources, Finance Minister Muhammad Aurangzeb has been in discussions with these banks to revive their loan portfolio with Pakistan, and the finalisation of the loan is expected to occur very soon.
Morning News: Pakistan receives second IMF tranche of $1.02b: SBP - By Vector Research

May 15 2025


Vector Securities


  • Pakistan has received a second tranche of $1.023 billion, equivalent to 760 million in Special Drawing Rights (SDR), from the International Monetary Fund (IMF) under its Extended Fund Facility (EFF), the State Bank of Pakistan (SBP) announced on Wednesday. According to the central bank, the inflow will be reflected in the country’s foreign exchange reserves for the week ending May 16. With the latest transfer, total disbursements under the programme now stand at approximately $2.1 billion (SDR 1.52 billion).
  • As virtual technical-level discussions on the upcoming federal budget begin, the International Monetary Fund (IMF) expects Pakistan’s total revenue to grow to nearly Rs20 trillion in the next fiscal year, up from the current estimate of less than Rs17.8tr, with an emphasis on tight expenditure controls to ensure sustainable debt servicing.
  • Barron’s, an American weekly magazine and newspaper published by Dow Jones & Company, has lauded Pakistan’s recent economic turnaround, terming it a “macroeconomic miracle of sorts”—while also underscoring the fragility and deep structural risks the country still faces.
Morning News: Pakistan meets key IMF conditions - By Vector Research

May 8 2025


Vector Securities


  • The International Monetary Fund's $7 billion bailout package largely remained on track during the first nine months of this fiscal year, as the federal and provincial governments met three out of five major fiscal conditions, with the Federal Board of Revenue (FBR) remaining the only weak link. The FBR missed its two key conditions of collecting Rs9.17 trillion total revenues and Rs36.7 billion from retailers under the Tajir Dost scheme during July-March period of this fiscal year, showed the fiscal operations summary released by the Ministry of Finance on Wednesday.
  • The government has launched the first Green Sukuk aiming at to attract a broader investor base, deepen financial markets, and accelerate the country’s transition to a green and resilient economy. The inaugural issuance, ranging between Rs20 billion and Rs30 billion, will be conducted through an auction process, with the Pakistan Stock Exchange (PSX) playing a central role in listing and promoting this innovative instrument to investors.
  • Pakistan’s international bonds slipped around 1 cent after India attacked Pakistan and Azad Kashmir on Wednesday in response to tourist killings in April, sparking the worst fighting in more than two decades between the nuclear-armed enemies.The 2036 bond slipped 0.9 cents to be bid at 72.477 cents, Tradeweb data showed.
Morning News: Rate cut; KIBOR drops across all tenors - By Vector Research

May 7 2025


Vector Securities


  • The Karachi Interbank Offered Rate (KIBOR) declined across all tenors on Tuesday, following a cut in the key policy rate by the State Bank of Pakistan (SBP).
  • Standard & Poor’s Global Market Intelligence on Tuesday forecast further rate cuts by the State Bank of Pakistan (SBP) during the current fiscal year following a 100bps reduction to 11pc by the Monetary Policy Committee on Monday. In a brief analysis, S&P Global Market Intelligence said the SBP delivered a larger-than-expected rate cut to 11pc as headline inflation bottomed out.
  • The total number of Roshan Digital Accounts (RDA) has crossed 0.8 million with the addition of 8092 new accounts in March 2025 while the volume of funds received in RDA so far surpassed the $ 10 billion mark.
Morning News: Policy rate slashed to 11% - By Vector Research

May 6 2025


Vector Securities


  • Beating the market expectations of a 50 basis points (bps) cut, the State Bank of Pakistan (SBP) has slashed the policy rate by 100 bps to 11%, effective May 6, 2025, reflecting easing inflationary pressures. However, the central bank has highlighted that the broader economic landscape remains fraught with challenges, including sluggish GDP growth, weak large-scale manufacturing, persistent fiscal slippages, and external sector vulnerabilities. 
  • Sustained escalation in tensions with India would likely weigh on Pakistan’s growth and hamper the government’s ongoing fiscal consolidation, setting back Pakistan’s progress in achieving macroeconomic stability, said Moody’s Investors Services (Moody’s). The rating agency also stated that higher defence spending would potentially weigh on India’s fiscal strength and slow its fiscal consolidation.
  • Efforts are under way to jack up real GDP growth to around 3 percent for the current fiscal year amid low investment and savings rates. Top official sources confirmed to The News that it is yet to be ascertained from where this level of growth will be achieved at a time of contraction in the Large-Scale Manufacturing (LSM) and dismal performance in the major crops of the agriculture sector. Second quarter growth was jacked up by tinkering with livestock growth, which is the highest in the history of the country.
Morning News: IMF to proceed with Pakistan review despite India’s objections - By Vector Research

May 5 2025


Vector Securities


  • The International Monetary Fund (IMF) has confirmed that its Executive Board meeting related to Pakistan bailout programme will proceed as planned on May 9, 2025. “As has been announced, the Executive Board meeting for the first EFF [Extended Fund Facility] review and RSF [Resilience and Sustainable Facility] request is scheduled for May 9. The Board meeting is going to take place as planned so there is no change,” said Mahir Binici, the IMF’s Resident Representative for Pakistan, in a statement.
  • Standard Chartered Pakistan has maintained a 3.0 per cent economic growth forecast for the country for FY25, citing IMF loans and strong worker remittances as key factors supporting the country’s improving macroeconomic outlook. “We expect economic growth to pick up in the last two quarters of the current fiscal year (ending in June), driven by the combined effect of 1,000bps of monetary easing over the past months and rapidly declining inflation,” Farooq Pasha, country economist at Standard Chartered Pakistan, said at an event in Islamabad.
  • The Standard and Poor’s (S&P) Global Ratings recommended Pakistan to stay the course, deepen the reform momentum, and focus on embedding permanence in macroeconomic stability, with international partners, while expressing readiness to support the country in achieving these objectives.