⚡ Flash Summary

The MCB Pakistan Stock Market Fund (PSM) quarterly report for the period ended September 30, 2025, indicates a positive performance. The fund generated a return of 31.39%, slightly below the KSE-100 Index return of 31.73%. The Net Asset Value (NAV) per unit increased significantly to Rs. 339.4486 from Rs. 258.3504. The fund’s equity exposure stood at 90.5%, with major holdings in Commercial Banks, Fertilizers, Textile, and Cement companies. The report anticipates continued GDP growth and improved external financial positions for Pakistan.

📌 Key Takeaways

• 📈 KSE-100 Index increased by 31.7% FYTD.
• 💰 SBP’s foreign exchange reserves remained stable around USD 14.4 billion.
• 💹 USD/PKR appreciated by 0.9% to 281.3 during the fiscal year.
• 📉 Headline inflation averaged 4.2% during 1QFY26, compared to 9.2% last year.
• 🌱 Revised GDP growth clocked at 3.0% in FY25.
• 🏦 FBR tax collection increased by 12.8% in 1QFY26 to PKR 2,885 billion.
• 💹 Average trading volumes for KSE-All Index increased to 956.0 million shares.
• 💲 Average trading value increased by 44.0% to near USD 156 million.
• 🏦 Banks, Cements, and E&P sectors were major contributors to the index rally.
• 💹 PSM generated a return of 31.39%.
• 📊 Overall equity exposure stood at 90.5% on September 30, 2025.
• 💰 Net Assets of the fund stood at Rs. 31,436 million, a 54.64% increase.
• 💹 Net Asset Value (NAV) per unit was Rs. 339.4486, an 81.0982 increase per unit.
• 🔮 GDP growth expected to clock at 3.5% in FY26.
• 🏦 SBP reserves expected to increase to USD 17.5 billion by year end.

🎯 Investment Thesis

Given the fund’s solid performance, diversified holdings, and the positive outlook for the Pakistani economy, a HOLD recommendation is appropriate. The fund has demonstrated an ability to generate returns comparable to the broader market while maintaining a diversified portfolio. Further upside may be realized from the expected GDP growth and stabilization of the external financial position.