Fertilizer: Offtakes show first recovery in CY25; but high inventory and agri stress still weigh - By AKD Research

Jun 17 2025

AKD Securities

• Fertilizer offtakes recorded the first improvement during CY25, driven by availability of interest-free loans under the Punjab Kisan Card scheme and preemptive buying amid rumors of price increase post budget.

• Urea sales improved by 5%YoY to 418k tons, while, DAP, CAN, & NP sales increased by 2.4x/2.5x/60% YoY, respectively.

• EFERT and FATIMA’s urea sales increased by 86%/3.7x YoY, driven by discount offering and improved product availability. In contrast, FFC’s urea offtakes declined by 28%YoY on high base

Technology: IT Exports in May-25 down by 1% YoY to record US$329mn - By Topline Research

Jun 17 2025

Topline Securities

• Pakistan recorded monthly IT exports of US$329mn in May-2025, down by 1% YoY while up by 4% MoM. These monthly IT exports in May-2025 are higher than last 12-month average of US$314mn. This is the first YoY decline in IT exports after 19 consecutive months of growth.

• Export proceeds per day were recorded at US$16.5mn for May-25 vs. US$15.9mn in Apr-25.

• This takes 11MFY25 IT exports to ~US$3.5bn, up by 19% YoY.

Economy: Pakistan Inflation to clock in at 3.5-4.0% in Jun 2025 - By Topline Research

Jun 17 2025

Topline Securities

• Pakistan’s Consumer Price Index (CPI) for Jun 2025 is expected to clock in at 3.5-4.0% YoY, taking FY25 average to 4.64% compared to 23.41% in FY24. The MoM inflation in Jun 2025 is expected to clock in at +0.6%.

• Inflation is expected to be higher due to an uptick in food prices by 1.3% MoM due to Eid festivities. The tomatoes and potato prices are expected to rise by 64% and 24%, respectively. However, this was partially offset by 33% decrease in chicken prices.

• Housing, water, electricity and gas segment is expected to witness a rise of 0.26% MoM in Jun 2025 due to an increase in electricity prices by 3.04% which is mostly offset by an 8% decrease Liquefied Petroleum Gas (LPG).

Cement : Lahore High Court upholds 6% Royalty on Punjab Manufacturers - By Taurus Research

Jun 17 2025

Taurus Securities

• In a recent development, the Lahore High Court has upheld its decision, to maintain the higher royalty charge i.e. 6% of the ex-factory cement price (PKR 1,250-1,350 per ton) – previously PKR 250/ton in FY24 for Punjab based manufacturers - ruling against the cement companies. We believe the affected Companies are likely to file on appeal against the judgment in the Supreme Court.

• Hence, the decision cannot be considered final as yet. Nevertheless, cement companies operating out of Punjab are already providing for the higher royalty charge. However, encashment of bank guarantees for securing on earlier stay order may have slight impact on cash flows for these companies.

• In contrast, KPK based cement producers are already enjoying high margins on selling cement bags at the discounted prices in Punjab. To recall, the KPK government announced provisional budget where they increased royalty charge from PKR 250/ton to PKR 350/ton. Resultantly, the disparity remains huge in the royalty charges of KPK and Punjab cement manufacturers i.e. PKR 950-1,050 per ton difference.

Economy: Analyst Briefing Takeaways: SBP Post-MPS Analyst Briefing - By Pearl Research

Jun 17 2025

Pearl Securities

• The State Bank of Pakistan (SBP) held a post-MPS Analyst Briefing on 16th June 2025 wherein Executive Director, Monetary Policy and Research Cluster and the Governor SBP explained the rationale of maintaining the policy rate unchanged at 11% and responded to questions.

• This decision takes into account the recent reacceleration in headline inflation during May— which largely aligned with projections—while acknowledging a modest easing in core inflation and a continued moderation in inflation expectations. The MPC also recognized nascent signs of economic recovery, though external sector vulnerabilities persist, notably in the form of a widening trade imbalance and subdued financial inflows. Furthermore, certain fiscal measures proposed for FY26 are anticipated to exert incremental pressure on the import bill.

• The MPC deliberations were informed by key macroeconomic indicators. Real GDP growth for FY25 has been provisionally recorded at 2.7%, driven by a marked acceleration in the second half of the fiscal year (3.9% in 2HFY25) relative to the first half (1.4% in 1HFY25). The growth trajectory for FY26 is expected to build on this momentum, supported by easing financial conditions, enhanced business confidence, and sectoral improvements.

Economy: MPC maintains policy rate at 11% - By JS Research

Jun 17 2025

JS Global Capital

• The State Bank of Pakistan (SBP) kept the policy rate unchanged at 11%, citing rising imports and tensions in the Middle East as key risks adding uncertainty to the commodity outlook and inflation. The MPC viewed this stance as necessary to maintain macroeconomic and price stability, especially as some FY26 budget proposals may further widen the trade deficit.

• It should also be noted that core inflation declined marginally as per May-2025 numbers but remains elevated and any uptick in the food and energy prices may lead to rise in inflation going forward.

• Supported by robust remittances and expected realization of planned inflows in coming weeks, SBP believes that reserves will clock in around US$14bn by Jun-2025. SBP Governor projects CA to also remain in surplus for FY25.

Technical Outlook: KSE-100; Expected to trade range bound - By JS Research

Jun 17 2025

JS Global Capital

• The KSE-100 index witnessed a volatile session to close at 122,225, up 82 points DoD. Volumes stood at 1,224mn shares compared to 968mn shares traded in the last session. The index is likely to revisit yesterday’s high of 122,903 where a break above potentially resuming the uptrend, targeting the all-time high of 126,718. However, any downside will find support within 121,410-121,610 range as a fall below can target the 30-DMA at 117,311. The momentum indicators are mixed, signaling no clear trading view. We advise investors to ‘Buy on dips’, keeping stoploss below 121,419. The support and resistance are at 121,775 and 122,789, respectively.

Market Wrap: Highlights of the day June 16, 2025 - By JS Research

Jun 16 2025

JS Global Capital

• The market opened on a positive note, touching an intraday high of 122,903, but failed to sustain momentum. It eventually closed at 122,225, as profit-taking emerged later in the session. On the economic front, the State Bank kept the policy rate unchanged at 11%, aligning with expectations. Trading activity was dominated by small-cap stocks, reflecting short-term speculative interest. Market volume stood at 1,224mn shares, with top activity in WTL, PASL, FCSC, KOSM and MDTL. We advise investors to maintain a cautious stance and avoid aggressive exposure for now. Risk management remains key amid geopolitical uncertainty and macro developments.

Pakistan Economy: MPC statement & analyst briefing takeaways - By Insight Research

Jun 16 2025

Insight Securities

• In today’s MPC meeting, SBP has kept policy rate unchanged at 11%, inline with market expectations. The committee noted that inflation recorded an uptick to clock in at ~3.5% in May’25, as expected and is likely to inch up in coming months and stabilize in target range during FY26. The impact of policy rate cut is kicking in as reflected in improved economic activity. The committee highlighted that trade deficit and shortfalls in planned inflows posses risk to external account. The MPC further elaborated that some of the actions announced in budget might have negative impact on trade balance.

• Key developments highlighted by the MPC includes provisional GDP growth of 2.7% for FY25 and ambitious growth target of 4.2% for FY26, successful disbursement of US$1bn from IMF after completion of first review of EFF program, revised estimate of primary deficit at 2.2% of GDP and some decline in agriculture output compared to initial estimates.

• Overall, MPC believes the current real policy rate is sufficiently positive to keep inflation within the target range of 5%–7%. However, timely receipt of planned inflows, achieving targeted fiscal consolidation and implementation of structural reforms are crucial for maintaining macroeconomic stability and ensuring sustainable economic growth. Moreover, fluid geopolitical situation and its impact on oil prices will remain a key variable for Pakistan.

Pakistan Economy: Geo-political tensions to weigh on the economy - By Taurus Reseach

Jun 16 2025

Taurus Securities

• Escalation reaches new highs as Iran and Israel continue to trade blows at each other. Earlier, Israel had conducted pre-emptive strikes on Iranian nuclear and military infrastructure along with killing the country’s top military leaders and nuclear scientists. Since then Iran has conducted multiple rounds of retaliatory missile strikes inside Israel. The latter have been reciprocated by the bombing of more targets in Iran by the Israeli air force.

• The situation remains fluid as neither side seems to be willing to exercise restraint. Iran has also called-off negotiations with the US on its nuclear program. Further, Iran has also alleged the role of the US and its allies in the region in backing the Israeli attacks, invoking the possibility of striking US and its allies’ air bases and embassies in the region in case of further escalation. The latter may broaden the conflict, adversely affecting the world economy.