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.

Economy: Jun’25 Monetary Policy Review - By Taurus Research

Jun 16 2025

Taurus Securities

• State Bank of Pakistan’s Monetary Policy Committee (MPC) in its meeting today kept the benchmark policy rate unchanged at 11.00%, in line with expectations. The MPC highlighted the marginal decline in core inflation in May’25, with expectations of NCPI trending upwards going forward – albeit remaining within the SBP’s target range of 5%-7%. Wherein, recent budgetary measures are likely to have limited impact on inflation, although upside risks to this outlook remain very high.

• Economic growth is picking-up gradually, likely to gain more traction next year with the impact of earlier rate cuts still unfolding. The MPC also noted potential risks to the external sector in the form of: i) widening trade deficit; and ii) weak financials inflows. Additionally, certain proposed FY26 budgetary measures are also likely to widen the trade deficit more.

• Moreover, the MPC also pointed towards the recent sharp increase in oil prices as a result of the evolving geo-political situation in the Middle-East. Accordingly, the MPC has flagged Pakistan’s external outlook as susceptible to multiple risks like heightened geopolitical tensions, volatility in international oil prices, possible adverse impact of proposed budgetary measures, and potential shortfalls in planned financial inflows.

Pakistan Fertilizer: Recovery sets in - By Foundation Research

Jun 16 2025

Foundation Securities

• The dry spell in the Fertilizer sector is beginning to end with urea dispatches up 5/67% YoY/MoM respectively to 418KT in May’25. However, fertilizer offtake continued with its sluggish trend in 5MCY25 fueled by Govt’s decision to abolish support prices that has severely impacted farmer income. During 5MCY25, Urea/DAP sales recorded a decline of 31/19% YoY to only 1,768/340KT. Company wise analysis reveals that FFC urea offtake declined/inclined 28/92% YoY/MoM to 207KT in May’25, whereas EFERT/FATIMA recorded a jump of 86%/3.7x YoY and 76/84% MoM to 142/54KT, respectively. AGL urea offtake dwindled 26/25% YoY/MoM to reach 15KT in May’25. Industry DAP offtake jumped 2.4x YoY (flat MoM) in May’25 to 95KT. FFC/EFERT DAP offtake inclined 2.2/7.6x YoY and surged/dropped 27/57% MoM to 68/14KT, respectively, in May’25.

• Fertilizer sales picked up pace in May’25: Pakistan domestic Urea offtake increased by 5/67% YoY/MoM in May’25, reaching 418KT. DAP offtake increased 2.4x YoY to 95KT, whereas no change was observed on a MoM basis. NP offtake jumped 60/6% YoY/MoM in May’25 to 76KT, while CAN offtake increased 147/86% YoY/MoM to 83KT. In May’25, industry urea inventory levels increased drastically to 1,316KT, an eight year high, due to sluggish demand amid weak crop pricing and previously high stock levels. Similarly, DAP inventory has reached 238KT. Company-wise urea inventory was recorded at 359/570/321/66KT for FFC/EFERT/FATIMA/AGL, respectively, in May’25. DAP inventory of FFC/EFERT reached 139/19KT.

Economy: The MPC keeps the policy rate unchanged at 11% - By Pearl Research

Jun 16 2025

Pearl Securities

• The State Bank of Pakistan’s Monetary Policy Committee (MPC) held its meeting today wherein the committee decided to maintain the policy rate unchanged at 11% due to emerging risks amid evolving global backdrop which may exert external pressure as well as erosion of offsetting base year effects in its inflation outlook.

• At its meeting today, the MPC decided to maintain the policy rate at 11%, viewing this stance as appropriate in light of emerging external risks and to safeguard macroeconomic stability and anchor inflation expectations. The Committee observed that the uptick in headline inflation to 3.5% YoY in May 2025 aligned with earlier projections, as the favorable base effects on food prices gradually eroded. At the same time, core inflation recorded a slight moderation, and inflation expectations among households and businesses further softened.

• Despite the more favorable inflation readings, the MPC highlighted the persistence of significant external risks that could undermine Pakistan’s macroeconomic stability. In particular, the Committee drew attention to heightened global economic uncertainty, driven by escalating trade protectionism and tariff measures, alongside volatile geopolitical conditions that continue to fuel instability. The MPC also highlighted that rising geopolitical tensions are contributing to increased volatility in international oil prices, thereby amplifying external vulnerabilities. Additionally, the potential adverse effects of proposed fiscal measures and the risk of shortfalls in planned external inflows were noted as factors that could further exacerbate inflationary pressures and undermine overall price stability.

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.