⚡ Flash Summary

LAKSON-FUNDS is reviewing the quarterly report for the Lakson Income Fund (LIF) for the period ended September 30, 2025. The LIF posted an annualized return of 10.76% compared to the benchmark of 10.66%, outperforming by 0.1%. The fund size as of September 30, 2025, is PKR 15,814 million. The report also highlights improvements in Pakistan’s economy, with inflation easing and foreign reserves improving, although recent floods pose downside risks.

📌 Key Takeaways

• 📈 LIF outperformed its benchmark by 0.1%, achieving a 10.76% annualized return.
• 💰 The fund size reached PKR 15,814 million as of September 30, 2025.
• 📊 Asset allocation is heavily concentrated in cash (20.2%) and T-bills (29.8%).
• ⚖️ Weighted average maturity (WAM) of the LIF portfolio stands at 703 days.
• 🚫 LIF did not utilize its borrowing facility during the reviewed period.
• 📉 Pakistan’s Q1-FY26 average inflation saw a notable decline to 4.2% from 9.2% in the same period last year.
• 💸 The current account deficit (CAD) reached USD 624 mn for the first two months of FY26.
• 💹 Exports rose 11% YoY to USD 6.7 bn, driven by textiles and food.
• ⬆️ Remittances offered further support, growing 7% to USD 6.35 bn.
• 🏦 Foreign exchange reserves improved to USD 19.8 bn by the end of September.
• 🇵🇰 The Pakistani Rupee appreciated by 0.9% FYTD, closing September at PKR 281.3/USD.
• 🤝 A major circular debt resolution agreement was signed on 24 Sep’25, paving the way for a PKR 1.225trn bank loan.
• ✔️ S&P Global upgraded Pakistan’s sovereign credit rating to B- from CCC+ on 24 Jul’25.
• 💹 The KSE-100 Index rose 41,114 points (33% QoQ) to close at 165,494 in 1QFY26.
• 🏦 The Central Bank maintained the policy rate at 11% in the Monetary Policy Committee meeting held in Sep-25.

🎯 Investment Thesis

Based on solid performance and an improving macro environment, the investment recommendation is HOLD. The LIF has demonstrated an ability to generate competitive returns in a challenging market. Given the positive trends in the Pakistani economy and the fund’s effective management, the outlook is stable. Any change will depend on future performance.