Pakistan Economy: Monetary Policy Survey 56% of the participants expecting status quo; we also expect no change - By Topline Research

Jun 12 2025

Topline Securities

• State Bank of Pakistan (SBP) is scheduled to hold its Monetary Policy Committee (MPC) meeting on May 05, 2025.

• In a Poll conducted by Topline Securities, 56% of the market participant expect a status quo in upcoming monetary policy meeting compared to 31% in last poll. While 44% are expecting a rate cut of at-least 50bps.

• Out of total 44% rate cut participants, 19% are expecting 50bps cut , and 25% are expecting 100bps cut.

Highnoon Laboratories (HINOON): Corporate Briefing Key Takeaways - By Topline Research

Jun 12 2025

Topline Securities

• Topline Securities organized Corporate Briefing Session of Highnoon Laboratories(HINOON), where management discussed financial performance and future outlook.

• HINOON outperformed the industry, with its revenue growing at a 10-year CAGR of 23%, compared to the pharmaceutical industry’s 10-year CAGR of 15%.

• HINOON’s revenue grew by 25% to Rs24.6bn in 2024, of which 8% was driven by volume growth and 17% by price increases. The management expects the growth momentum to continue in the coming period and to outperform industry growth

Auto: Pakistan Car sales in 11MFY25 up 39% YoY; 2/3 wheelers record ~ 3 year high - By Topline Research

Jun 12 2025

Topline Securities

• Pakistan Car sales in Pakistan (as reported by PAMA) clocked in at 14,762 units in May 2025, reflecting a 35% YoY and 39% MoM rise.
• MoM rise was mainly due to lower base as Apr 2025 saw road closure in Sindh (due to strikes over canal issues) which delayed deliveries and thus lower sales.

• YoY growth is supported by a more stable macroeconomic environment, lower interest rates, easing inflation, and improving consumer sentiment.

Oil and Gas Development Company Ltd (OGDC): OGDC discovers oil and gas at Fakir-1 in Bitrism E.L., Sindh - By AKD Research

Jun 12 2025

AKD Securities

• Oil and Gas Development Company Ltd (OGDC) has announced an oil and gas discovery at the exploratory well Fakir-1, located in the Bitrism E.L., Khairpur, Sindh. The company (95% working interest), successfully tested the results in the Lower Goru formation with gas flow reaching 6.4mmcfd, alongside crude oil of 55bpd. We anticipate the aforementioned discovery to contribute an annualized EPS impact of ~PkR0.36/sh for the company.

• We reiterate our ‘BUY’ stance on OGDC with a Dec’25 target price of PkR371/sh, alongside a DY of 9% during the same period. Our outlook is strengthened due to the following aspects: i) strong production profile, ii) higher future exploration prospects on back of improving liquidity situation, iii) 8.33% stake in highly prospective Reko Diq Mining Project, iv) offshore working interest in Abu Dhabi Offshore Block-5, along with consortium partners and v) improvement in cash payouts.

Technical Outlook: KSE-100; Upside to continue - By JS Research

Jun 12 2025

JS Global Capital

• Bulls dominated the session as KSE-100 index gained 2,328 points to close at 124,353 level. Volumes stood at 1,041mn shares versus 593mn shares traded previously. If the gain continues, the next target will be at 125,947 which may later rise to 128,026 level. However, any downside will find support within 123,240-123,530 range. The RSI and the MACD have continued to rise, supporting a positive view. We recommend investors to ‘Buy on dips’, keeping stoploss below 123,238 level. The support and resistance are at 123,531 and 124,881, respectively.

Morning News: Budget 2025-26: Threat of Rs500bn tax hike if enforcement measures blocked - By Vector Research

Jun 12 2025

Vector Securities

• Finance Minister Muhammad Aurangzeb on Wednesday repeatedly warned that the government would be compelled to impose a further Rs400 to 500 billion in taxes if parliamentarians failed to approve the sweeping enforcement measures proposed in the 2025-26 budget — as they were already cleared by the International Monetary Fund.

• Pakistan looks set to exceed its annual remittances target of $38 billion with $3.7bn inflows in May. So far in the 11 months of the fiscal year 2025 — July to May — Pakistan received $35bn in remittances. With the addition of June inflows, the total remittances are expected to exceed the revised target of $38bn for the current financial year.

• The government raised approximately Rs1.1 trillion through auctions of Market Treasury Bills (MTBs) and floating-rate Pakistan Investment Bonds (PIBs). In the MTB auction, bids worth Rs853 billion were accepted by the State Bank of Pakistan. Similarly, the bond auction saw total acceptance of Rs206.91 billion.

Morning News: Housing scheme with SBP’s help: Rs5bn set aside for mark-up subsidy - By WE Research

Jun 12 2025

• In the FY26 budget, the federal government has allocated Rs 5 billion for a mark-up subsidy under a new low-cost housing scheme, launched in partnership with the State Bank of Pakistan, along with Rs 1 billion for the Naya Pakistan Housing Authority, to address the country’s housing shortage and revitalize the construction sector. This initiative follows the suspension of the "Mera Pakistan Mera Ghar" scheme in 2022 and includes several tax incentives, such as reduced withholding tax on property purchases and the abolition of the 7% Federal Excise Duty on property transfers. Finance Minister Muhammad Aurangzeb also announced tax credits for home loan interest on properties of specific sizes. Experts, including U.S.-based real estate consultant Dr. Anosh Ahmed, have praised these measures as timely and essential for stimulating economic growth, job creation, and industrial development, highlighting their potential to support middle-income families and boost real estate investment.

• In May 2025, the Securities and Exchange Commission of Pakistan (SECP) registered a record 3,609 new companies, bringing the total number of registered companies in the country to over 255,000. Nearly all incorporations (99.9%) were completed digitally, with over Rs2.7 billion in capital raised. Private limited companies constituted 59% of new registrations, followed by single-member companies at 37%. The IT and e-commerce sectors led with 718 new incorporations, followed by trading, services, and construction. The SECP also issued 56 licenses, including to NGOs, capital markets, insurance, and nonbanking finance entities. Additionally, foreign investment was reported in 98 of the newly registered companies.

• In a post-budget press briefing, Finance Minister Muhammad Aurangzeb announced a major tariff reform, eliminating additional customs duties on 4,000 out of 7,000 tariff lines and reducing duties on another 2,700 to support industrial growth and boost exports. This move, part of Pakistan’s broader economic restructuring, aims to lower input costs for exporters, integrate the economy into global supply chains, and transition from import substitution to export-led growth. The minister also introduced fiscal measures for relief to salaried individuals and small businesses, and prioritized support for construction and agriculture through lower transaction costs and improved credit access. Reforms in the digital economy include a new e-commerce framework and mandatory tax registration for small online businesses, alongside the imposition of an 18% GST on solar plant imports to support local manufacturing. The government has generated Rs400 billion in additional revenue this year and aims to raise the tax-to-GDP ratio to 10.9% by FY26. Aurangzeb also shared plans for bond repayments and new international market issuances, including a Panda Bond, while stressing the importance of improving Pakistan’s credit rating. The press conference was briefly disrupted by a journalists' boycott over the lack of a traditional technical briefing.

Auto: EV Momentum Meets Market Friction: FY26 Budget Insights - By HMFS Research

Jun 11 2025

HMFS Research

• The FY26 Federal Budget presents a mixed outlook for Pakistan’s auto sector. While policy direction supports electric vehicle (EV) adoption through tax differentiation, purchasing restrictions on non-filers and the withdrawal of GST concessions on entry-level vehicles may weigh on demand. Additionally, phased tariff liberalization offers cost relief on CKD inputs but raises competitive risks from cheaper CBU imports.

• The enforcement of a ban on vehicle booking, purchase, and registration for non-filers is expected to constrain demand in the formal economy, particularly in the >1000cc passenger car segment. Meanwhile, exemptions apply to motorcycles, rickshaws, tractors, and pickups up to 800cc.

• This measure may hinder volume recovery in the >1000cc segment, though exemptions for motorcycles and rickshaws offer limited relief for ATLH and SAZEW given the distinct customer base.

Morning News:Rs1trn set aside for PSDP - By WE Research

Jun 11 2025

• The 2025–26 budget allocates Rs1,000 billion for the federal Public Sector Development Programme (PSDP), marking a 28.5% decline from the previous year’s Rs1,400 billion, with provincial Annual Development Plans totaling Rs2,869 billion. A separate Rs355 billion is set aside for state-owned entities, up from Rs196.8 billion last year. The highest PSDP allocation goes to transport (Rs225 billion), followed by water resources (Rs184 billion), while climate receives a minimal Rs5.26 billion despite Pakistan’s vulnerability. Key dam projects—Bhasha, Dasu, and Mohmand—receive Rs60, Rs20, and Rs15 billion, respectively. Allocations also include Rs70 billion for merged districts, Rs74.5 billion for special areas (AJK and GB), Rs24.7 billion for health, Rs23 billion for IT and telecom, Rs61 billion for higher education, and smaller amounts for skills training, education endowment, and disease control. The PSDP vision, “Uraan Pakistan,” emphasizes inclusivity and national potential.

• The Finance Bill 2025–26 proposes to withdraw the 3% federal excise duty (FED) on the transfer of residential and commercial properties, effective July 1, 2025, which was initially imposed through the Finance Act 2024 and became subject to litigation. The government had earlier considered withdrawing it via ordinance but did not proceed. Additionally, withholding tax rates under Section 236K on property purchases are proposed to be reduced: 1.5% for properties up to Rs50 million, 2% for Rs50–100 million, and 2.5% above Rs100 million. In contrast, withholding taxes under Section 236C for sellers are being increased to 4.5%, 5%, and 5.5% for the same value brackets. Though no justification is provided for this disparity, it may incentivize buyers to prefer properties from builders and developers over the secondary market.

• In the 2025–26 budget presented by Finance Minister Muhammad Aurangzeb, modest tax relief has been proposed for the salaried class, though it falls short of expectations. The new tax policy exempts annual incomes below Rs 600,000, with the next slab (Rs 600,000–1.2 million) seeing the tax rate drop from 5% to 1%, providing an 80% tax cut. Those earning between Rs 1.2 million and Rs 3.2 million will see rates reduced slightly, while the top two slabs (incomes above Rs 3.2 million) remain unchanged at 30% and 35%. Despite an average relief of 29%, higher earners benefit more proportionally—with individuals earning over Rs 1 crore getting a 27% cut—while the majority of salaried workers see minimal impact. The salaried class, contributing Rs 430 billion in taxes in the first ten months of FY 2024–25 (over 10% of total tax collection), remains the most taxed segment, especially when compared to retailers and exporters. With taxes deducted at source by employers acting as withholding agents, this group has little room to evade taxes unlike others, reflecting continued fiscal pressure despite marginal relief.

Pakistan Economy: FEDERAL BUDGET FY26, Key Budgetary Measures - By Sherman Research

Jun 11 2025

Sherman Securities

• We view the FY26 budget as Positive for the stock market, given that the announced targets appear realistic and largely aligned with IMF expectations.

• With the budget now behind us, investor attention will shift toward macroeconomic indicators—particularly inflation trends and the external account. In this context, the trajectory of international oil prices will play a key role during FY26.

• We do not foresee any material changes to our corporate earnings estimates, as key heavyweight sectors such as Energy and Banks remain largely insulated from new taxation measures. Accordingly, we maintain our FY26 earnings growth projection at 12%.