Economy: SBP Keeps Benchmark Rate at 12%, Balancing Growth and External Account Stability - By AHCML Research
Mar 11 2025
Al Habib Capital Markets
- The State Bank of Pakistan (SBP) has decided to keep the policy rate unchanged at 12% in the current monetary policy review. This decision reflects a careful balance in response to evolving economic conditions, particularly in light of inflation, external sector challenges, and growing signs of economic recovery.
- The SBP’s Monetary Policy Committee (MPC) explained that inflation in February 2025 came in lower than anticipated, largely due to a drop in both food and energy prices. However, the Committee cautioned that while inflation has eased, there are still risks related to the volatility in these prices. Core inflation, in particular, remains stubbornly high, which means any rebound in food and energy prices could reverse the current downward trend in overall inflation.
- Despite the inflation concerns, economic activity has picked up, as seen in indicators like automobile sales, cement consumption, and the growth in private sector credit.
Sui Northern Gas Pipelines Limited (SNGP): FY24 Corporate Briefing Takeaways - By Taurus Research
Jun 5 2025
Taurus Securities
- SNGP, largest integrated natural gas utility in Pakistan, posted a record profit of ~PKR 18.97Bn in FY24, supported by all-time high sales of ~PKR 1Bn.
- Pakistan’s energy mix includes 30% natural gas (69% from SNGP, 31% from SSGC), 11% RLNG, 21% oil, 15% coal, 12% hydropower, 7% nuclear, and 4% from LPG and renewables combined.
- SNGPs ownership is split between 32% direct and 42% indirect Government holding, with the remaining 26% held by the public and others.
Autos: May-2025 sales to record highest levels since Dec-2022 - By JS Research
Jun 5 2025
JS Global Capital
- We preview automobile sales volumes for May-2025, expecting the three major players including Indus Motors Company Ltd (INDU), Honda Atlas Cars Ltd (HCAR), and Pak Suzuki Motor Company Ltd, representing 84% of the four-wheeler market, to post a major volumetric growth of 44%/49% YoY/MoM, reaching ~13.3k units.
- INDU and HCAR are expected to lead monthly growth with volumes up 2.4x and 69% YoY, respectively. The 49% MoM increase is largely due to delivery delays led by protest on highways over canal projects. Overall, we anticipate a 38% YoY growth for our sample in 11MFY25.
- We highlight key risks in the FY26 budget to include a potential carbon tax on petrol vehicles, reduced average tariffs on imported cars, extension of used car import age limit from 3 to 5 years, and higher sales tax on vehicles up to 800cc – all of which could significantly impact the auto industry sales.
Economy: Pre-Budget FY26 Market Sentiments - By Chase Research
Jun 5 2025
- Chase Securities conducted a pre-budget survey in the run up to the annual budget announcement.
- A total of 44 participants provided their insights on key issues.
- We believe that these insights are key to identifying market sentiments and gauging the confidence in the equity market.
- 27% of the participants expect KSE-100 to be above 150,000 points by the end of June 2026.
Technical Outlook: KSE-100; Upside to continue - By JS Research
Jun 5 2025
JS Global Capital
- Bulls continued to dominate the session as the KSE-100 Index gained 1,348 points DoD, closing at the 121,799 level. Trading volumes stood at 711mn shares, up from 578mn shares previously. We believe a break above 121,882 (yesterday’s high) will sustain the uptrend, with 123,375 and 125,947 as the next targets. On the downside, support is seen between 120,900 and 121,170, with a break below this range likely to trigger a corrective phase. Both the RSI and MACD are trending upward, reinforcing a positive outlook. We recommend investors 'Buy on dips,' while keeping a stop-loss below the 120,896 level. The support and resistance are at 121,169 and 122,155, respectively.
Morning News: Pakistan, ADB sign $300m ‘Subprogram II’ loan - By WE Reserach
Jun 5 2025
- The government of Pakistan and the Asian Development Bank (ADB) have signed a $300 million loan agreement under the “Improved Resource Mobilization and Utilization Reform Programme (Subprogramme-II),” aimed at supporting Pakistan’s macroeconomic stabilization and fiscal consolidation through structural reforms in trade, revenue generation, and capital market development. The agreement, signed by Dr. Kazim Niaz and ADB Country Director Emma Fan, is part of a broader $800 million financing package that includes a $500 million Policy Based Guarantee (PBG) to help raise $1 billion in commercial financing, reinforcing Pakistan’s efforts toward economic recovery and sustainability.
- At a lively early Independence Day celebration hosted by the US Embassy in Islamabad, Prime Minister Shehbaz Sharif announced a “new era” in US-Pakistan relations, emphasizing shared democratic values and historical ties dating back to 1947. Speaking to a crowd of political leaders, diplomats, and civil society members, Sharif acknowledged America’s longstanding development support while highlighting Pakistan’s heavy sacrifices in the fight against terrorism—over 90,000 lives lost and $150 billion in economic damage. He also criticized India over a recent conflict, calling the Pahalgam incident a false-flag operation and accusing New Delhi of civilian targeting, while affirming Pakistan’s military response. Despite tensions, Sharif expressed a desire for regional peace and praised former US President Trump for his role in de-escalating hostilities. Acting US Ambassador Natalie Baker echoed the spirit of partnership, speaking in Urdu and highlighting shared values and mutual respect.
- Pakistan’s finance team is in negotiations with the International Monetary Fund (IMF) to maintain the current 5% Federal Excise Duty (FED) on fertilisers and drop a proposed 5% FED on pesticides in the 2025–26 budget, following intervention by Prime Minister Shehbaz Sharif. The Prime Minister has also directed the Federal Board of Revenue (FBR) to reassess the proposed import tariff rationalisation plan to prevent negative impacts on the import bill. While the IMF appears to have relented on fertiliser and pesticide taxes after Pakistan argued these could hurt agricultural productivity—especially alongside the introduction of the Agriculture Income Tax (AIT)—it remains firm on imposing General Sales Tax (GST) in the formerly exempt FATA/PATA regions. Despite previous political efforts to preserve the exemption, a reduced GST rate of 12% is now expected to be implemented there in the upcoming fiscal year.
Morning News: IMF wants ‘strict compliance’ as budget enters final stages - By Vector Research
Jun 5 2025
Vector Securities
- Amid final consultations on the budget, the International Monetary Fund (IMF) wants strict compliance with programme requirements, including the coverage of agriculture income tax in provincial budgets to ensure effective collection starting no later than September 2025. The Fund also does not agree with a plan for incentivising enhanced power consumption desired by the federal government to absorb surplus capacity.
- The government of Pakistan and Asian Development Bank (ADB) on Wednesday signed a $300 million loan agreement for the “Improved Resource Mobilization and Utilization Reform Programme (Subprogramme-II).
- The National Economic Council (NEC) under the chairmanship of Prime Minister Shehbaz Sharif, Wednesday approved the national development outlay of Rs4.224 trillion (Rs4,224 billion), including federal Public Sector Development Program (PSDP) of Rs1,000 billion for the next budget. The real GDP growth has been envisaged at 4.2 per cent of GDP and CPIbased inflation at 7.5 per cent for FY2025-26.
Cement: May'25 local offtakes reach 21-month high amid improvement in construction activity - By AKD Research
Jun 4 2025
AKD Securities
- Cement dispatches for May’25 clocked in at 4.65mn tons, an increase of 9%YoY, driven by 9%YoY surge in local offtakes, while exports increased by 7%YoY.
- Industry-wide capacity utilization increased to 66% (up 4.6ppt YoY), highest in 21 months.
- We maintain a positive outlook on the sector on the back of anticipated gross margin expansion due to improvement in retention prices and declining power cost, supported by declining interest cost.
Fertilizers: Slight demand pick-up ahead of the Budget - By JS Research
Jun 4 2025
JS Global Capital
- As per provisional figures, Urea off-take during May 2025 is expected to clock in at 420k tons, up 6% YoY/67% MoM. This marks the first YoY growth in Urea sales volumes after a sustained period of weak performance since CYTD. While DAP volumes likely to arrive at 94k tons (+2.3x YoY). CYTD urea/ DAP sales are likely to post 31%/20% YoY decline.
- Company-wise, Fauji Fertilizer Company (FFC) is expected to post Urea off-take of 206k tons in May-2025, down 28% YoY. In contrast, Engro Fertilizers (EFERT) is expected to post 86% YoY growth reflecting a low base-effect, while the company is also expected to surpass the CYTD monthly run-rate.
- Urea inventory is expected to reach an 8-year high of 1.3mn tons in May-2025, similar to the levels seen during the same month in 2017/ 2020, which were later offloaded due to exports / strong sales in latter months. Although the chances for govt allowing exports are low at this point, however, any such allowance would favor EFERT more than the peers.
Refinery: GRMs Sharply Recovering - By Sherman Research
Jun 4 2025
Sherman Securities
- After plunging to lowest level of US$4.5 per barrel in April 25, Gross Refining Margins (GRMs) of local refineries significantly recovered to US$9.3 per barrel during ongoing month of June. This is positive for local refineries as their earnings are directly linked with changes in GRMs.
- Just to recall, highest GRM was recorded at US$30 per barrel during July 2022 while average GRMs during last 5 years stood at US$7 per barrel.
- GRM is the sum of the weighted average spread of products which a refinery is yielding on every barrel of crude it processes. Major products include Diesel (HSD), Gasoline (MS) and Furnace oil (FO).
Cement: May’25 dispatches up 39%MoM - By Taurus Research
Jun 4 2025
Taurus Securities
- Total Cement dispatches in May’25 up 39%MoM on the back of reviving construction demand i.e. Domestic sales went up 46% MoM to 3.6Mn tons. Whereas, total export sales up 20%MoM on account of better retention prices and surge in demand post Indo-Pak de-escalation which benefited North Players, mainly. On a YoY basis, total domestic sales were up 9% in May’25 as lower interest rates and record low inflation have supported players to improve their margins and increased volumes. Although, higher duties and taxes on the cement sector have reduced the overall demand, resulting in overcapacity.
- North-based domestic sales increased 42%MoM in May’25 due to surge in the construction activities amid seasonal demand and better volumes i.e. lower retail prices compared to the South region. Wherein, export sales were up significantly by 1.1xMoM on the revival of regional sales post Indo-Pak deescalation. South-based domestic sales surged by 64%MoM in May’25 amid revival of the construction demand. On the export front, South-based exports were up 5%MoM, respectively.
- On a YoY basis, North-based domestic sales surged 10%YoY in May’25 due to pick up in construction demand on the back of lower interest rates and record low inflation. Similarly, Northbased exports were up significantly by 48%YoY, reflecting higher demand from the export regions. On the South front, domestic sales during May’25 increased by 5%YoY. However, export sales dropped 2%YoY to 0.75Mn tons, respectively.
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%).
Economy: IMF Backs Pakistan’s Reforms With USD2.4bn Funding Package - By AHCML Research
May 19 2025
Al Habib Capital Markets
- The IMF report on Pakistan highlights the country's economic performance under the Extended Fund Facility (EFF) program, noting improvements in fiscal discipline, external stability, and structural reforms. However, challenges persist, including subdued growth, elevated core inflation, and risks from external shocks such as recent US tariff hikes. Key achievements include meeting quantitative performance criteria (QPCs), rebuilding foreign reserves, and advancing tax reforms. The report emphasizes the need for sustained policy tightening, fiscal consolidation, and energy sector reforms to ensure long-term stability. Additionally, the proposed Resilience and Sustainability Facility (RSF) aims to address climate vulnerabilities and promote green growth.
- Pakistan's economy has shown signs of stabilization but continues to face significant challenges. After recording GDP growth of 2.5% in FY24, economic activity softened in the first half of FY25, with growth slowing to 1.3% in Q1 and 1.7% in Q2. This deceleration primarily reflects lower yields from major Kharif crops and persistently subdued industrial activity.
- On the inflation front, headline inflation declined sharply to just 0.7% year-on-year in March 2025, driven by tight macroeconomic policies and declining global food and energy prices. However, core inflation remains stubbornly high at around 9%, indicating persistent underlying price pressures.
Economy: Historically, the Stock Market Recovers After Conflicts End - By AHCML Research
May 9 2025
Al Habib Capital Markets
- When wars or tensions between India and Pakistan flare up, the stock market, especially Pakistan’s tends to drop sharply due to panic selling and foreign investor withdrawals. However, history shows that once the conflict ends and the risk of full-scale war fades, the market usually bounces back.
- For example, after the 2001-2002 military standoff, PSX had crashed by 25%, but it recovered once troops withdrew. Similarly, in 2019, after the Balakot airstrikes, the market initially fell 5% but stabilized within weeks as tensions eased.
- This pattern suggests that while geopolitical crises cause short-term volatility, markets often regain lost ground once stability returns. The recovery speed depends on the economy’s strength, the ongoing final meeting with IMF for USD1.3bn tranche after matching required condition from IMF we expect the market recover speedily. Longterm damage usually happens only if the conflict leads to sanctions or deep economic crises. In most cases, when the guns fall silent, investors return, and stocks climb back up.
Cherat Cement Company Limited (CHCC): Result Preview 3QFY25 - By AHCML Research
Apr 28 2025
Al Habib Capital Markets
- Cherat Cement company limited is anticipated to report a PAT of PKR 1,512 million (EPS: PKR 7.78) for 3QFY25, reflecting an increase of 22% YoY supported by higher retention prices and improved cost efficiencies
- Sales revenue for the quarter is expected to reach PKR 8,155 million, down 6% YoY, mainly due to decline in local and export dispatches.
- Gross margins are estimated at 32%, up 2ppt YoY, primarily driven by lower fuel and coal prices as well as improved cost efficiencies. The company's investment in renewable energy has contributed to this margin expansion.
D.G Khan Cement Company Limited (DGKC): Result Preview 3QFY25 - By AHCML Research
Apr 25 2025
Al Habib Capital Markets
- D.G Khan Cement company limited is anticipated to report a PAT of PKR 1,762 million (EPS: PKR 4.02) for 3QFY25, reflecting an increase of 49.26% YoY.
- Sales revenue for the quarter is expected to reach PKR 19,147 million, up 34.21% YoY, supported by higher local and export dispatches.
- Gross margins are estimated at 20.10%, down 5.4ppt YoY.
Indus Motor Company Limited (INDU): Result Preview 3QFY25 - By AHCML Research
Apr 24 2025
Al Habib Capital Markets
- Indus Motor Company is anticipated to report a PAT of PKR 5,662 million (EPS: PKR 72.03) for 3QFY25, reflecting 27% YoY increase.
- Sales revenue for the quarter is expected to reach PKR 61,256 million, reflecting a robust 29% YoY and 41.5% QoQ growth. This performance is primarily driven by a significant increase in volumetric sales, which rose by approximately 40% YoY and 42% QoQ
- Fortuner Sales volume witnessed a substantial rise of 159% YoY and 110% QoQ, highlighting strong consumer demand and improved supply chain efficiency.
Faysal Bank Limited (FABL): 1QCY25 Result Preview - By AHCML Research
Apr 22 2025
Al Habib Capital Markets
- Faysal Bank Limited is expected to report an EPS of Rs. 2.8, accompanied by a Rs. 1.5/share payout as the first interim dividend for CY25. We anticipate a 6% YoY increase in Net Interest Income (NII) for 1QCY25 compared to 1QCY24, driven by a lower cost of deposits amid a declining interest rate environment. However, on a QoQ basis, NII is expected to decline by 4% due to the lower policy rate translating into reduced markup income.
- On the non-funded side, non-interest income is projected to grow by 36% YoY, supported by higher fee-based income and capital gains. Compared to the previous quarter (4QCY24), non-interest income is expected to rise by 6%.
- Conversely, non-interest expenses are expected to surge by 50% YoY, in line with FABL’s branch expansion strategy and investment in digital infrastructure.
Maple Leaf Cement Factory Limited (MLCF): Result Preview 3QFY25 - By AHCML Research
Apr 21 2025
Al Habib Capital Markets
- Maple Leaf Cement is anticipated to report a PAT of PKR 2,067 million (EPS: PKR 1.97) for 3QFY25, reflecting an impressive 83% YoY increase.
- Sales revenue for the quarter is expected to reach PKR 16,711 million, up 5%YoY, supported by higher local and export dispatches.
- Gross margins are estimated at 34.6%, up 6.6ppt YoY, primarily driven by lower fuel and coal prices as well as improved cost efficiencies. The company's investment in renewable energy—20 MW solar power projects and 37 MW capacity through the Waste Heat Recovery Power Plant (WHRP)—has contributed to this margin expansion.
Meezan Bank Limited (MEBL): Strong Upside Potential – Buy - By AHCML Research
Apr 8 2025
Al Habib Capital Markets
- We initiate our coverage of Meezan Bank Ltd. (MEBL) with a Dec’25 Target Price (TP) of PKR 335, signifying a potential capital gain of 30.45%. The bank is also offering a healthy dividend yield of 9.76% (an expected dividend payout of PKR 25/share for CY25). The total return (capital gains + dividend) stands at an attractive 40.21%. MEBL is trading at a CY25 P/E ratio of 5.44x and a PBV of 1.62x.
- Meezan Bank's stellar growth in recent years can be attributed to several factors: 1) Remarkable deposit growth averaging 24% since 2020, driven by rising consumer preferences for Islamic banking; 2) Meezan stands as a major beneficiary of capturing the Islamic banking market share due to its first-mover advantage; 3) The growing consumer interest in Islamic banking and the SBP’s plan to transform Pakistan’s banking system to align with Shariah principles will further propel Meezan’s growth trajectory. Additionally, other highlights include the lowest infection ratio, consumer ease, and improved asset quality with a high coverage ratio.
- MEBL stands as Pakistan’s premier Islamic bank, delivering consistent growth, profitability, and resilience in an evolving financial landscape. Over the past five years, MEBL has demonstrated exceptional performance, with net interest income soaring from PKR 64.8bn in 2020 to PKR 287bn in 2024, driven by robust deposit growth and an expanding asset base. The bank’s efficiency has improved significantly, with its cost-to-income ratio declining to 26.78% in 2024, reflecting strong operational discipline. Net profit surged to PKR 102bn, while asset quality remains stable, supported by a prudent risk management framework.
Economy: Trade Tensions Trigger a Global Sell-Off - By AHCML Research
Apr 7 2025
Al Habib Capital Markets
- Global stock markets tumbled after a surprise move by U.S. President Donald Trump, who announced new tariffs on imports, sparking fresh fears of a trade war. Countries like China responded with their own import duties, intensifying global tensions. Investors are now worried that escalating trade barriers could hurt global growth, profits, and jobs. Stock markets across Asia, Europe, and U.S. futures have all dropped sharply, as fear and uncertainty take the lead over company fundamentals. Markets are now in a wait-and-see mode, hoping for signs of de-escalation from world leaders.
- The Pakistan Stock Exchange (PSX) has recently faced significant volatility, primarily influenced by escalating global trade tensions and domestic economic factors. The benchmark KSE-100 Index plummeted over 5%, triggering a temporary halt in trading. This sharp decline was largely a reaction to the U.S. government's implementation of new tariffs on imports, which unsettled global markets and prompted widespread investor concern.
- The imposition of these tariffs has raised fears of a global trade war, adversely affecting investor sentiment worldwide. Pakistan, facing a steep 29% tariff on its exports to the U.S., is particularly vulnerable. In response, the Pakistani government announced plans to send a delegation to Washington to negotiate relief from these tariffs.