⚡ Flash Summary

Faysal Funds’ Directors Report for the quarter ended September 30, 2025, reveals a resilient Pakistani economy despite flood impacts. The KSE-100 Index gained significantly, reflecting strong investor sentiment. The report details the performance of various Faysal Funds, with a mix of outperformance and underperformance against their benchmarks. Key macroeconomic indicators show some improvement, though challenges persist, particularly related to inflation and external debt.

📌 Key Takeaways

• 🇵🇰 Pakistan’s economy showed resilience despite flood impact, with GDP growth target revised to 3.5% from 4.2%.
• 📈 Large-Scale Manufacturing (LSM) index grew by 8.93% YoY in July 2025.
• ⚠️ Current Account Deficit (CAD) recorded at approximately USD 624 million.
• 💰 Remittances grew by 7% YoY, reaching USD 6.35 billion.
• 📉 Headline inflation declined to 4.1% in July 2025 but edged up to 5.6% in September 2025.
• 🏦 PKR/USD parity remained stable at 282.71, with SBP Reserves at USD 14.4 million.
• 🎯 FBR set a tax collection target of PKR 14,131 billion for FY26, but fell short by PKR 198 billion in Q1.
• 🤝 IMF engagement remains constructive, focusing on fiscal performance and circular debt reduction.
• 🚀 KSE-100/KMI-30 Index gained ~32/33%, closing at 165,493/246,267 points.
• 💸 Mutual Funds and Individual investors were net buyers, while Foreign Corporates were net sellers.
• 📊 Average daily volumes/value traded increased ~47/44% QoQ for KSE-100.
• ✨ Sector-wise, Banks, Cements, Power & Automobile Assemblers outperformed.
• 💼 Faysal Halal Amdani Fund yielded 9.03% versus benchmark of 9.74%.
• 💸 Faysal Islamic Cash Fund yielded 8.97% versus benchmark of 9.74%.
• 📈 Faysal Islamic Stock Fund posted an absolute 1QFY26 return of 28.72% against its benchmark return of 33.20%.

🎯 Investment Thesis

HOLD, given that the equity market is expected to maintain upward momentum. However, due to the recent sharp rally, a selective approach favoring cyclical and high-dividend yielding stocks is recommended.